I’m convinced that tax rates on the upper middle class (top 10%) need to be much, much higher. An interesting premise of Modern Monetary Theory is that taxes can and should be used to control inflation, and further that this can be done in a controlled way based on where inflation is occurring. If that is correct, one can reason that inflation for things like housing, education, etc., is caused by taxes being too low—specifically among the folks with high incomes competing for these goods.

More specifically, it appears that taxes are too low on the upper middle class specifically. In my neighborhood near Annapolis, the price of houses has doubled since 2016. We came here because it was a nice place where you could afford a house without being a dual professional household, but that’s increasingly less true. The problem, it seems to me, isn’t billionaires. The house next to mine wasn’t torn down and replaced with a new million dollar home by a billionaire. It was some upper middle class professional. The top 10% has been riding the coattails of the top 0.1% for decades and has significantly pulled away from the median American. Unlike billionaires, which are few in number, this is a large class of people who can use their growing incomes to outbid everyone else for homes, education, etc. At the same time, taxes on these folks are the lowest in the developed world, even lower today than after Reagan’s second round of tax cuts.