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“How Progressive is the U.S. Federal Tax System? A Historical and International Perspective”

“How Progressive is the U.S. Federal Tax System? A Historical and International Perspective”. Thomas Piketty - Economics Professor, Paris Emmanuel Saez - Economics Professor, Berkley National Bureau of Economic Research. Flat tax. Progressive Tax.

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“How Progressive is the U.S. Federal Tax System? A Historical and International Perspective”

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  1. “How Progressive is the U.S. Federal Tax System? A Historical and International Perspective” Thomas Piketty- Economics Professor, Paris Emmanuel Saez- Economics Professor, Berkley National Bureau of Economic Research

  2. Flat tax Progressive Tax

  3. What does that mean for income distribution? Progressive Tax Flat Tax

  4. Why not a flat tax? • Does a CEO deserve their income less than a minimum-wage employee? • Irrelevant Reasons • Portion is undeserved rent (Land ownership) • Income inequality leads to crime/murder • As income rises, need for that income drops • Gov. must tax where the wealth is *Roughly 20 economically weak countries have a flat tax

  5. What makes our system progressive • FROM the RICH • Estate Taxes • Capital Gain Taxes • Tax credit limitations + • TO the POOR • Welfare • Social Security • Other Gov. Programs

  6. 2004 1970

  7. Change • 1. Dramatic reduction in rates • 2. Corporations paying half the taxes they did in the 60’s • 3. Payroll taxes substantially larger… BUT only incomes over 106,800 are effected.

  8. Conclusion • Other developed countries are far more progressive • UK/France • Most dramatic changes occur within top 1% of earners • Tax system is being shaped by the wealthy • Progress Taxation has declined dramatically since the 60’s • Top earners used to pay over 70% of income in Taxes

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