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Comment by rayiner | Hacker News Reader

https://taxfoundation.org/data/all/federal/us-income-growth-...

“Contrary to common perceptions, the CBO data indicate that: (1) income earned after taxes and transfers has increased over the past several decades for all income groups, (2) the federal tax system is progressive and has become more progressive over the past three decades, and (3) the federal system relies heavily on higher earners to raise revenue for government services and means-tested transfers.”

https://www.forbes.com/sites/timworstall/2015/01/08/the-us-t...

I can’t find data before 1980.

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Also I want to point out that a significant chunk of the "increasingly progressive" nature is driven by increases in income inequality over that same timeframe. Both pre and post tax income even for higher earners has increased (as a percentage rate) much much faster than lower earner so anything other than "increasingly progressive" would be an absurdity.

Not saying I entirely disagree with it. I just don't think that data is that compelling since it's a pretty shallow analysis of taxation and income of high earners (which is fine, not every article needs to be that deep)

"Three decades" is doing a lot of work there. Reagan?

The data starts at 1979, before Reagan’s major tax reform in 1986: “In contrast, the effective federal tax rate for the top 1 percent has remained relatively high over this period, ranging between 25 and 35 percent since 1979.”

Reagan’s tax reform wasn’t a gimmick: it broadened the tax base (to encompass more kinds of income) and lowered rate to keep the effective tax rate basically the same.

The biggest problem is we simply doesn’t tax enough. We want to grow the scope of our government to be more like Europe, but we aren’t willing to tax the middle and upper middle class the way they do in Europe. We had an au pair from Germany. Our effective tax rate in a blue state as a dual income professional couple was the same as she paid at her entry level office job.

Reagan did 3 big tax bills, 81 tax cut, 83 social security and the 86 reforms you're referencing.

You're right that the 86 reform was pretty progressive but with all 3, the rich did great, poor did alright and middle class did poorly, IMO.

According to the data, the share of federal taxes paid by the top 1% increased from about 15% in 1979 to 25% in 2019, while the share paid by the bottom 20% decreased from about 20% to 15%.

That's absolute dollars right? As in, they're paying more total dollars in income tax, despite a lower tax rate, because they're making so much more compared to 79? (Income inequality has steadily gone up).

What was their effective rate in those years? What percentage of their income are they paying compared to the nonrich, and how did it trend?

It’s not absolute dollars. It’s the percentage of the total tax burden that they’re paying.

Because income inequality is growing, they have more of the total money, they're paying more of the total taxes despite a lower rate.

Whether you think that's a good thing or a bad thing, it's hard to call it progressive.

you’re assuming that the tax bills had no effect on the economy…instead, the 80’s saw a massive reduction in inflation and tremendous economic growth that helped all parts of society. Is it possible that the tax cuts and the economic growth were related?

I contend that taxing higher earned incomes at higher and higher rates is not progressive. Real wealth is made via appreciation in property prices, and those mostly detractive and rent seeking members of society are the least taxed.

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