Well, it’s finally happened – America now has a regressive tax system in which the 400 richest families pay a lower effective rate than the poorest 50% of Americans.
That’s according to Christopher Ingraham in the Washington Post, who reports on the latest research into what different income groups actually pay in terms of all taxes, not just income tax :
The following graph shows that the super-rich used to pay a lot more but that the gap has now not only disappeared but gone negative for the first time:
Presidential contender Elizabeth Warren has a plan to put that right. This is her “Ultra Millionaire Tax“, which happens to quote the economists who produced the above research:
This week also brings news that Warren has moved into poll position in the race for the Democratic nomination. Donald Trump who used to call her “fake Pocahontas” has upgraded his insults, now describing her as “Uber Left.”
I’m not sure this will work for him. The idea that super millionaires should pay a higher rate tax than working class and middle class Americans, will strike most voters as fair not Leftwing.
Unlike her rival Bernie Sanders Warren is not a socialist. Indeed, she’s described herself as a “capitalist to my bones.” she does, however, want to save capitalism from its worst excesses and thus America’s wealthy elites may see her super millionaire Tax as a good deal.
Whether any of the 400 richest families are donors to the Warren campaign, I don’t know. But even if none of them are, their ability to pay so little tax is propelling her to the Democratic nomination – and perhaps all the way.