Billionaire Tom Perkins, already famous for his comparison of the effort to address income inequality to , is apparently enjoying being a media star. After he threw out the idea of voting based on wealth at a public appearance, he was asked if he was kidding. He said he was being “outrageous.” He’s obviously taking pleasure in getting people angry, and some people are like that.
Just one thing to keep in mind over all the wailing and gnashing of teeth over taxes by the wealthy: tax rates on the rich are quite low in historical terms, and effective tax rates, which measure what they’re actually paying, are lower still.
Right now, the highest federal income tax rate is 39.6 percent. That’s up from 35 percent in 2012 and the same level as during most of the Clinton years. After bouncing around for three decades after the income tax was made law, the tax rate was 94 percent in 1945. Through the 1950s and early 60s, it was in the 70-percent range. During the Reagan years, it was cut to 50 percent. During the administration of Bush the Elder, it was briefly down to 28 percent.
The effective tax rate is lower. For the wealthy, somewhere in the upper 20 percent range. And lower-income households pay a larger share of their incomes in taxes than wealthier ones. And, of course, we all know some of our biggest corporations pay little or nothing in taxes.
So, don’t shed too many tears over the tax burden on our wealthiest citizens.