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From Tax Professor Deborah Greier:

Democrats should focus on the following statement:  The distribution of the tax burden worsens inequality because there is less income inequality before annual tax bills are paid than after they are paid.  That's the key point that should be stressed, over and over again, like a broken record (in the days of yore before CDs):  The government imposes taxes in such a way that the distribution of income is more unequal than if the government imposed no taxes at all.
 

Congressional Budget Office data discussed below shows that the gap (which is increasing) in pretax income between the very wealthy and the rest is smaller than the gap in after-tax income. Thus, the distribution of the tax burden itself is increasing inequality.  I need to stress here that I am not talking about using the tax system to reduce income inequality, which is a use of the tax system that is utterly anathema to conservatives and libertarians alike.  What I am saying here is that the tax system should be structured so that the distribution of the aggregate tax burden itself does not actually worsen income inequality.  In other words, the government should not be intervening through the tax system to make the gap between the very rich and everyone else actually greater than it otherwise is (in the absence of tax). I think most Americans, whether Democrat or Republican (or Rockefeller Republican), would agree with that statement.

Go Forth and Spread the Bad News.

Originally posted to ohwilleke on Tue Jun 07, 2005 at 02:05 PM PDT.

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Comment Preferences

  •  Good diary. (none)
    Our tax system is cheating anyone who is not wealthy. This needs to be brought out on every discussion of economic issues because the Right uses welfare and progressive taxation to shut down any debate on such matters. For instance, in October 2004 Bush removed a number of tax deductions for low-income people, which by his own definition is a tax raise. Yet all we heard about is Kerry, not Bush, planning to raise everyone's taxes... when Bush had already done just that. This was not mentioned nearly enough to have an effect.

    Can't say I side with the professor on this:


    I need to stress here that I am not talking about using the tax system to reduce income inequality, which is a use of the tax system that is utterly anathema to conservatives and libertarians alike.

    What I am saying here is that the tax system should be structured so that the distribution of the aggregate tax burden itself does not actually worsen income inequality.  In other words, the government should not be intervening through the tax system to make the gap between the very rich and everyone else actually greater than it otherwise is (in the absence of tax).

    So, the tax system should just maintain present inequality. Whoop dee doo.

    No tax system is ever neutral. People are allowed to write home mortgage interest off their taxes but cannot write off monthly rent payments or health insurance premiums. That is a clear preference for one type of activity (and, really, economic class) over another.

  •  Great find!!! (none)
    Bigger gap post tax than pre-tax? Hot damn!

    A dear friend of mine unbelievably went over to the dark side during this election. It was an immense shock, and it was an aftershock to learn that what pushed him over the edge was Kerry's plan for Iraq, which he didn't find different from Bush's. He also revealed that he gets his news from Fox & CNN, which is stunning because he's one of the most well-read and mature people I know. I've been preparing an email which will be a one-time effort to convince him to expand his source of news.

    The neat thing about this diary is that he's an accountant. Oh, yeah, we made a bet. I asked him how long it would take for Baghdad to be safe for him to go. He said five years. Ahaha. Fine: one of us will change his voter registration in five years.

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