Wednesday, April 16, 2003

Discussion: Progressive Taxes

Joe, I think your numbers are suspect. Here you can find the most recent Census data on income, with a summary briefing here . Best I can tell, the chart detailing the "Share of Aggregate Income Received by Each Fifth and Top Five Percent of Households," at A-2 would capture the data needed to get your numbers. The lowest fifth (or two of ten) received 3.5% of the total income, the top fifth got 50.1%, and the top five percent received 22.4% of the total income. Two of the ten in our scenario, then, would each receive $245 in their paycheck (3.5% of $14,000, split two ways), the top two would take in $3507 each (50.1% of $14,000, split two ways)--the CEO, if he is in the top one of twenty, would at most take in $6272 (22.4% of $14,000, multiplied by two). I don't trust my own numbers, either, but I think MoJoJoJo's trying to pull something shady.

All the same, I think it's a fair argument that the progressive tax system may discourage the right people and encourage the wrong ones (I concede that there is probably a ceiling to the incentive argument. Does a billionaire really think about marginal value on that next buck he might make?). But I also think it's fair to urge that those with the most too lose by a regime change should pay the most to see that it doesn't happen.

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