–Here’s my more detailed take on the tax fairness question, over at the NYT Economix Blog, including a graph I that I think quite gets to the nub of the matter.
–CBPP’s Chuck Marr has put together such an elucidating collection of tax charts that I cannot help but pilfer a couple.
–As I point out at the end of my NYT piece (and here too), the US is not a high-tax country. That, according to this chart from the OECD, is an understatement. In fact, “when measured as a share of the economy, total government receipts (a broad measure of revenue) are lower in the United States than in any other member of the Organisation for Economic Co-operation and Development (OECD), even after accounting for the modest revenue increases in the 2012 “fiscal cliff” deal and the taxes that fund health reform.”
–Shift from corporate to payroll taxes: “Individual income tax revenues have held steady for many decades at a little under half of federal revenue. The share of federal revenue from payroll taxes (mostly Social Security and Medicare taxes) grew sharply between the 1950s and 1980s and has since remained relatively stable. Conversely, the share of federal revenue from corporate taxes fell sharply between the 1950s and 1980s and has remained at this lower level.”
Note that the latter trend has coincided with sharp increases in profitability, both pre- and post-tax. Given that the trend in business investment has been nothing special, implying the ratio of capital to output hasn’t increased much, these factors all imply an increase in the return to capital, amidst a flattening of the return to labor (the real wage). Just like Piketty said would happen!