Tuesday, June 29, 2010

There are three other charts from the CBO on tax incidence that are of interest.  The top chart shows a line for the percentiles of income including the top 1%. It has risen rather swiftly for those making the most dough.  The second chart is income tax rates by quintile. The third chart shows the rates by quintile which shows the extreme progressivity of the current system. 

So let's review the bidding here.  Our current system is supposed to be progressive to help redistribute income.  (That is to give money from rich folks to poor ones.) Yet over the last couple of decades the income share of the richest people has gone up.  That dipped a bit when rates were lowered a bit.  So the best thing to build social equity in the system is to increase the rate of progressivity even more?  Huh?

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