According to this report, tax rates on the top earners have rebounded to pre-Reagan rates. This is surprising to me. It’s also good. We’ve been making the tax system more and more regressive so long. It’s long since time we moved back to a more progressive tax system, where those who can afford it, and get the most benefits, pay the highest rates.
That is the fundamental point of the progressive tax system: When you earn more, you have more ability to pay — the one millionth dollar is worth less to the millionaire than the twenty-thousandth dollar is to someone who makes $25K/yr. And so the person receiving millions can afford to give up more of that dollar (and its friends). That, combined with the fact that the millionaire has more to lose (millions, in fact), needs more protection, and generally enjoys more benefits from a safe, protected, civil society than those who can’t afford the time or money to enjoy that.
Like any principle, this can be taken to points where it is unfair, or deeply counterproductive. This is why we have more than one kind of way that gov’t funds itself. It’s not all income taxes. But progressive taxation is the most fair way to distribute the bulk of the cost of having a society that has common benefits (security, infrastructure, financial security, …).
So after years of trickle-down economics that haven’t worked, it’s time to readjust back to a more progressive system where those that can afford it pay more.