Of course, as a ProPublica cache of tax documents shows, loopholes and tax dodges result in actual income tax rates being significantly lower. At the same time, the bottom 90% held less than a quarter of America's wealth, compared with more than a third in 1989.Ĭurrently, the federal government taxes all income above $518,400 at 37% for single filers, with an additional 3.8% investment tax on incomes over $200,000. The most affluent 1% controlled 39% of all wealth - including all cash, real estate, stocks, bonds and other investments - in 2016, up from less than 30% in 1989.
Studies have shown lower income and corporate tax rates, combined with other 'trickle-down' policies such as deregulation, have led to steadily rising income for the richest Americans and wealth inequality. As an expert on tax policy, I have observed that there's a big obstacle standing in the way of a wealth tax: the Constitution.Ĭoncerns about inequality have increased in recent decades.Īmericans enjoyed substantial economic growth and broadly shared prosperity from the end of World War II into the 1970s.īut in the 1980s, President Ronald Reagan dramatically slashed taxes on the wealthy - twice - cutting the top rate on wages from 70% to 28%.
