You must be a republican if you believe that:
Public schools are an unnecessary government expense but prisons are not.
A minimum wage is a governmental intrusion in the private market but the oil depletion allowance for corporations to drill for oil off our coast is not.
Warrantless wiretapping of american citizens is constitutional, but a women’s right to choose is not.
Races exist but racism does not.
Torture is necessary for the defense of American freedom but the freedom from unreasonable searches and seizures is not.
Providing affordable healthcare for children and all Americans is a governmental interference with the private market but subsidies to defense contractors are not.
Environmental regulation diminishes our freedom, but racial profiling does not.
The earned income tax credit that rewards the lowest wage earners in the nation is an unwarranted redistribution of income, but lowering the capital gains credit on unearned investment income is not.
The illegal alien who risked everything to better himself economically by coming to america is a criminal, but the bankers and investors on wall street that gambled away your pension funds and put your jobs at risk are not.
That your ancestors who arrived in America before exclusionary immigration laws were passed were welcome contributors to the American nation, but those arriving after those laws were passed are not.
The Constitution of the United States created a Christian Nation but the First Amendment was a mistake.
God wrote Leviticus but Jesus did not preach the Sermon on the Mount.
The Second Amendment is the most important right in the Bill of Rights, but that the First Amendment is a mistake.
Bullies are manly but peacemakers are not.
Commentators on Fox News are intelligent observers of American life and that…everyone else is wrong.
Republican requirements for their preferred presidential candidates seem to be: at least a sixth-grade education, attendance at a Christian church every Sunday and a commitment to rifle the poor box on the way out.
This essay is a companion to an earlier TPJ post, “Average Income Tax Rates and the Financial Health of the Nation” (October 31, 2018):
https://trenzpruca.wordpress.com/2018/10/31/4185/
That post was updated on January 6, 2026:
https://trenzpruca.wordpress.com/2026/01/06/average-income-tax-rates-and-the-financial-health-of-the-nation-update/
The original essay examined long-run trends in average effective federal income tax rates by income percentile and argued that changes at the very top of the income distribution—not relief for ordinary taxpayers—have driven most of the transformation of the U.S. tax system over the last half century. It further suggested that repeated reductions in top effective tax rates were associated with fiscal stress and recurring political conflict over deficits and public programs.
Since that post was written, the data have been extended, additional policy cycles have played out, and the chart accompanying this update allows a clearer view of the underlying pattern. After reviewing the chart, several conclusions can be drawn—about political approaches to taxation, about who benefits and who does not, and about the long-term consequences for American citizens and the health of the nation.
What follows is not a partisan scorecard, but an interpretation of what the chart itself shows.
What the Chart Is (and Is Not)
The chart plots average effective federal income tax rates—taxes actually paid as a percentage of cash income—by income group, from 1960 through 2020. It does not show marginal rates. It does not include payroll taxes or state and local taxes. And it does not claim that taxation alone determines economic outcomes.
Its value lies elsewhere: it shows who actually paid what, on average, over time, and how those burdens shifted across political regimes.
This essay therefore addresses changes in the federal income tax specifically, not the total tax burden experienced by households once payroll, state, and local taxes are included.
First and Central Conclusion: The System Has Become Less Progressive Because of the Top
The most striking and unambiguous feature of the chart is the long-run decline in effective tax rates at the very top of the income distribution.
From the 1960s onward, the effective rates paid by the top 1%, the top 0.1%, the top 0.01%, and the top 0.001% fall dramatically. In the early postwar period, these groups faced average effective rates that today would be considered politically unimaginable. By the 2000s and 2010s, those rates had fallen to levels far closer to those paid by upper-middle-income households.
By contrast, the Bottom 50% and the Middle 40% experience relatively modest changes. Their effective rates fluctuate within a narrow band, rising and falling slightly across decades but never undergoing the structural transformation seen at the top.
This matters because it tells us what did not happen. The decline in progressivity was not driven by sweeping relief for ordinary Americans. It was driven by a sustained reduction in the fiscal claims made on very high incomes.
Second Conclusion: Party Control Matters—Directionally and Repeatedly
Overlaying presidential administrations on the chart reveals a consistent pattern.
Republican administrations—most notably Reagan, Bush II, and Trump—are associated with sharp downward shifts in effective tax rates for high-income groups, particularly the top fractiles. Democratic administrations—Clinton and Obama—are associated with stabilization or partial recovery of those rates.
The pattern is not perfect, and it does not require ideological purity to see it. But over six decades, the directional tendency holds. Republican regimes push the top lines downward. Democratic regimes slow the decline, sometimes reversing it modestly, but never restoring the earlier structure.
This suggests that tax outcomes are not random or purely technocratic. They reflect enduring political commitments about who should bear the cost of government.
Third Conclusion: For Most Americans, Income Tax Policy Changes Little
One of the quiet lessons of the chart is how little changes for most taxpayers.
Despite constant political rhetoric about tax relief for “working families” or “the middle class,” the effective income tax rates for the Bottom 50% and Middle 40% show no dramatic regime-to-regime transformation. Gains are incremental. Losses are incremental. The large moves occur elsewhere.
This helps explain a recurring feature of American politics: many citizens experience tax debates as abstract, even theatrical, while fiscal outcomes continue to be decisive for a relatively small segment of the population.
Fourth Conclusion: Top-End Tax Cuts Are Not Offset Elsewhere in the Income Tax
Another important absence in the chart is revealing. When effective tax rates at the top fall, there is no corresponding rise in the effective rates paid by lower- or middle-income groups.
This means that reductions at the top are not “paid for” within the income tax system itself. The adjustment occurs elsewhere: through higher deficits, increased federal debt issuance, or pressure on non-tax mechanisms such as spending cuts.
This directly links the chart to the broader fiscal debates that follow major tax cuts: debt ceilings, entitlement reform, and “tough choices” about public investment.
Fifth Conclusion: Tax Policy Is Ideological, Not Economically Inevitable
The chart spans periods of strong growth, weak growth, inflation, disinflation, globalization, and financialization. The economy grows under very different tax regimes.
What remains constant is not economic necessity, but political preference. The repeated return to top-heavy tax reductions reflects an ideological belief about incentives, merit, and entitlement—not a settled empirical conclusion about growth.
The chart undermines claims that low effective tax rates at the top are required for prosperity. They are, instead, chosen.
Sixth Conclusion: Democratic Administrations Act as Moderators, Not Restorers
While Democratic administrations do move the system in a more progressive direction, the chart shows they do not rebuild the tax structure that existed before 1980.
Each partial recovery is followed by a sharper rollback. Over time, the floor ratchets downward. The result is a long-term drift that no single election reverses.
This helps explain why debates over inequality persist even after nominally progressive reforms: the baseline itself has shifted.
Seventh Conclusion: The Nation’s Fiscal Health Is the Silent Casualty
Finally, the chart illuminates a deeper issue raised in the earlier essay: the connection between tax structure and national health.
A government that repeatedly lowers its claim on top incomes while maintaining expectations for defense, infrastructure, healthcare, and retirement security must compensate somehow. The chart suggests how: by increasing debt issuance and by shifting risk forward in time.
The fiscal consequences do not appear immediately in the tax lines themselves. They surface later, in deficit politics, interest costs, and conflicts over social programs.
Reflection
Taken together, the chart tells a simple but uncomfortable story. Over six decades, American tax politics has focused less on what government should do and more on who should pay for it. The answer has increasingly been: not those at the very top.
Republican administrations accelerate that shift. Democratic administrations slow it. But the long-run trajectory remains intact.
The chart does not tell us what policies we must adopt. It tells us what we have been choosing—and what those choices imply for American citizens and for the financial health of the nation.
The Trump Administration, 2025–2026, and the Next Turn of the Ratchet
Seen against the full arc of the chart, the Trump Administration’s second term does not represent a break from recent history so much as its continuation—sharper in rhetoric, faster in execution, but familiar in direction.
The effective tax-rate chart makes clear that Republican administrations since Reagan have shared a common orientation: reduce the fiscal claim on high incomes first, accept downstream adjustments later. Trump’s first term fit that pattern neatly. The second term, beginning in 2025, appears positioned to entrench it.
The 2026 Moment: When Temporary Becomes Structural
The years 2025–2026 matter because they are the point at which earlier “temporary” provisions either expire or are renewed. Historically, this is the moment when political intent becomes unmistakable.
The chart suggests what to expect. When faced with expiration cliffs, Republican administrations have consistently chosen to lock in lower effective tax rates at the top, even when doing so widens fiscal gaps. Democratic administrations, when in power at similar moments, have tended to allow partial reversals. The current alignment of power points strongly toward the former outcome.
If that occurs, the chart’s long-term story will not change in shape—only in depth. The top fractiles, already far below their historical effective rates, will remain there. The Bottom 50% and Middle 40% will see little change in their income tax burdens, but will encounter the consequences elsewhere.
What the Chart Implies for Citizens, Not Just Taxpayers
The chart alone does not show deficits, interest payments, or program cuts. But it tells us where pressure accumulates.
When effective income tax rates at the top remain low and do not rebound, fiscal adjustment shifts away from taxation and toward:
For most Americans, this does not arrive as a line item labeled “tax increase.” It arrives as constraints: what government can no longer afford, what benefits must be means-tested, what investments are postponed, what risks are privatized.
In that sense, the chart helps explain why debates over Social Security, Medicare, healthcare access, and public investment intensify after periods of elite tax reduction. The system has already made its choice; the argument is over who absorbs the consequences.
The Ratchet Effect, Revisited
Perhaps the most sobering lesson of the chart is what might be called the ratchet effect. Democratic administrations may slow or modestly reverse top-end tax reductions, but Republican administrations resume them—and typically push further.
If the Trump Administration in 2025–2026 succeeds in extending or deepening the post-2017 tax structure, the ratchet clicks again. Future debates will begin from an even lower baseline of top effective tax rates, narrowing the political space for revenue-based solutions.
At that point, the question posed in the original 2018 essay becomes unavoidable:
Who pays for the government the nation needs and wants?
The chart makes one thing unmistakable. For more than forty years, Republican administrations have driven effective tax rates at the very top steadily downward, while Democratic administrations have at best slowed the decline without reversing it. Trump’s second term enters that pattern not as an exception, but as an accelerant. If the post-2017 tax structure is locked in again in 2026, the result will not be broad relief for ordinary Americans—whose income tax burdens barely move—but a further narrowing of the nation’s revenue base. The costs will surface later, as deficits, program cuts, and institutional strain. This is not an accident. It is a choice, repeated often enough that it now feels normal.
Explicit 2026 Scenarios, Tied Directly to the Chart
Scenario 1: Full Extension of Current Rates (Most Likely)
If the Trump Administration and Congress extend the post-2017 rate structure largely intact, the chart’s long-term pattern simply deepens.
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Top income groups remain at historically low effective rates.
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Middle and lower-income groups see little direct change in income taxes.
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Fiscal pressure shifts to deferred costs and future program retrenchment.
In chart terms, the top lines stay pinned near their modern lows while the rest of the distribution barely moves. The ratchet clicks again.
Scenario 2: Partial Extension with Targeted Sweeteners
If some provisions are modified—new exclusions, deductions, or carve-outs favored rhetorically as “working-class relief”—the visual outcome changes little.
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Marginal or symbolic gains may appear for some taxpayers.
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The largest dollar benefits still accrue at the top, where income volume is greatest.
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The overall progressivity of the system continues to erode.
On the chart, this appears as noise at the bottom and middle, with structural continuity at the top.
Scenario 3: No Extension, Forced Adjustment (Least Likely)
If political gridlock prevents extension and forces partial reversion toward higher top rates, the chart would show a temporary upward movement for the highest fractiles.
But history suggests this outcome would be unstable. Past partial recoveries under Democratic administrations have been followed by sharper rollbacks once power shifts again.
In chart terms, this produces a brief kink—not a new trend.
What the Chart Ultimately Predicts
Regardless of the scenario, the chart implies a sobering conclusion: American tax politics no longer treats the top of the income distribution as the primary stabilizer of national finances.
As long as that remains true, debates over deficits, entitlement reform, and “hard choices” will continue to recur—not because solutions are unavailable, but because revenue capacity has been deliberately constrained.
The chart does not tell us what must be done.
It tells us what we keep doing—and what that choice costs.
Sources & Notes
Source: Piketty & Saez; World Inequality Database. Average effective federal income tax rates on cash income.
