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400 Richest Americans Paid Less In Taxes Than Any Other Income Group

"The question of our time is this: will we tolerate it? Or will we take back our democracy from the oligarchs who run this country?"
400 Richest Americans Paid Less In Taxes Than Any Other Income Group
Image from: NurPhoto/Getty Images

For the first time in U.S. history, the 400 wealthiest Americans paid less in taxes last year than people in any other income group, thanks to decades of tax cuts and loopholes benefiting the rich.

A year after the Republican tax plan—often called the #GOPTaxScam by critics—was passed into law, the richest people in the country were subject to a 23 percent rate in local, state, and federal taxes.

As New York Times columnist David Leonhardt showed Sunday in a graphic accompanying his op-ed, "The Rich Really Do Pay Lower Taxes Than You," the tax rate wealthy Americans are forced to pay has plummeted over the last seven decades while middle-income households have paid roughly the same share of their incomes each year.

Watch how radically taxes on the wealthy have fallen over the past 70 years:

(Full column: https://t.co/XP0a4Iljti) pic..com/dGxmOjQ1b5

— David Leonhardt (@DLeonhardt) October 7, 2019

In 1950, rich Americans paid 70 percent of their income in taxes—a system that Rep. Alexandria Ocasio-Cortez (D-N.Y.) has suggested returning to, drawing derision from conservatives. By 1980, the 400 wealthiest people paid 47 percent of their incomes in taxes.

Leonhardt called the trend "maddening."

"Over the last 75 years the United States tax system has become radically less progressive," Leonhardt wrote.

The op-ed also refers to the fact that billionaire Warren Buffett was dismissed by economists and journalists in 2012 when he said his secretary paid a larger share of her income in taxes than he had to pay.

Office workers who pay a greater share of their earnings to contribute to services for the greater good than the wealthy CEOs of their companies pay are "the norm now," Leonhardt wrote.

The op-ed was praised by critics of the U.S. economic system, including Sen. Bernie Sanders (I-Vt.).

"The question of our time is this: will we tolerate it?" tweeted the 2020 presidential candidate. "Or will we take back our democracy from the oligarchs who run this country?"

We now know the richest 400 Americans have rigged the system to pay lower taxes than everyone else in the country.

The question of our time is this: will we tolerate it? Or will we take back our democracy from the oligarchs who run this country? https://t.co/wn4DbztrTA


↓ Story continues below ↓

— Bernie Sanders (@SenSanders) October 7, 2019

Leonhardt and other observers noted that the debate over whether to force wealthy Americans to pay their fair share versus protecting their wealth at all costs is centuries old, and those arguing for the former have triumphed in the past.

"Inequality is driven by policy choices, not some inherent laws of nature," tweeted Don Moynihan, a professor at Georgetown University.

Want to understand US inequality?

In 1950 the overall tax rate for the richest 400 households: 70%
1980: 47%
2018: 23%

Middle and low income households rates did not change, now higher than the richest.

Inequality is driven by policy choices, not some inherent laws of nature. https://t.co/WspshykT4U

— Don Moynihan (@donmoyn) October 7, 2019

Others wrote that the increasingly regressive tax system explains a variety of issues facing today's working families.

Why aren’t the subways functional? Why is college so expensive? Why is your health insurance premium so high? Why don’t you have a pension? This is the answer. https://t.co/TlMliOHlwt

— Sam Biederman (@Biedersam) October 7, 2019

What a crazy coincidence that carbon emissions have exploded over the same period that the wealthy have been allowed to hoard more and more wealth wonder if there might be a connection there https://t.co/UirCMjiUlG

— Kate Aronoff (@KateAronoff) October 7, 2019

On the same day Leonhardt published his op-ed, CNBC released a report claiming millennials are "stingy" and are to blame for a sluggish economy.

In the opening paragraph, Pippa Stevens suggested both that millennials spend too much money on avocado toast and that they save too much of their income:

Millennials—the selfie obsessed, avocado toast-loving generation—might be behind slower economic growth, according to a research note last week from Raymond James. This new generation, scarred by the financial crisis, is saving more than the free-spending boomers did before them, and it's causing an economic imbalance.

The article wasn't the first to point to the spending habits of Americans between the ages of 23 and 38 as the reason fewer people are contributing to the real estate market.

"Hm. There's also a theory that the 400 wealthiest people in America paid less taxes this year than ever in history," tweeted one critic.

Ocasio-Cortez corrected CNBC, writing that millennials are "Not stingy. Broke."

Not stingy. Broke.

And low wages, poor work standards, high cost of living, & a runaway student loan crisis have everything to do with it. https://t.co/rmSaALnQkZ

— Alexandria Ocasio-Cortez (@AOC) October 7, 2019

Instead of blaming young Americans for a slowing economy, tweeted Disney executive John Drake, "Why don't the 400 wealthiest people in the U.S. (who received a giant tax cut) stimulate the economy through spending?"

This is a wack take and a gross tee up.

Why don’t the 400 wealthiest people in the US (who received a giant tax cut) stimulate the economy through spending?

It’s comical to blame millenials for all the problems you caused. Yeesh! https://t.co/wu6WrbcBxu

— johntdrake (@johntdrake) October 7, 2019

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