Comment by mbesto | Hacker News Reader

Comment by mbesto | Hacker News Reader

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Marginal tax != effective tax[0]

Yes they literally did. Your article says exactly what I said:

The 91 percent bracket of 1950 only applied to households with income over $200,000 (or about $2 million in today’s dollars). Only a small number of taxpayers would have had enough income to fall into the top bracket – fewer than 10,000 households, according to an article in The Wall Street Journal. Many households in the top 1 percent in the 1950s probably did not fall into the 91 percent bracket to begin with.

You need to understand the difference between marginal tax and effective tax. What you're referring to is effective tax. The parent very explicitly said marginal tax.

[0] - https://www.cbpp.org/research/federal-tax/marginal-and-avera...

The Saez paper points out that even among the 0.01% people were avoiding that top rate.

It points it out, but it's not conclusive. From the article you linked:

The data from Piketty, Saez, and Zucman is not divided among federal, state, and local taxes, so it is difficult to tell exactly how much the rich were paying in federal income taxes specifically during this period.

Some of the distributional assumptions in the Piketty, Saez, and Zucman paper are questionable. In particular, the authors assume that the full burden of the corporate income tax falls on owners of capital, which may not be correct. However, the authors note that they “have tested a number of alternative tax incidence assumptions, and found only second-order effects.”

> The Saez paper points out that even among the 0.01% people were avoiding that top rate.

Of course there were - tax avoidance is inevitable, but to say literally none of them were pay the stated rate with no evidence is disingenuous.

Bringing this back the overall point of the discussion - with a marginal tax rate that high (even with avoidance) it raised the effective tax rate nearly ~600 basis points higher. That's significant.

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