By Gabriel Zucman and Gus Wezerek
Gabriel Zucman is an economist at the University of California, Berkeley, and one of the authors of “The Triumph of Injustice.” Gus Wezerek is a writer and graphics editor for Opinion.
“In the decades after World War II, close to 50 percent of American companies’ earnings went to state and federal taxes. Economically, it was a golden period. Middle-class incomes grew at roughly the same rate as those of the richest Americans.
But as globalization gave companies the ability to choose where they recorded profits, Congress scrambled to keep their business by lowering corporate taxes. In 2018, American companies were taxed at an average effective rate of less than 14 percent, by our calculations.
Corporate tax breaks have helped business owners amass inconceivable amounts of money over the past few decades. Meanwhile, middle-class Americans have footed the bill, as Congress has propped up the budget by raising taxes on wages.”
Timothy F. Geithner, Jacob J. Lew, Henry M. Paulson Jr., Robert E. Rubin and
The authors are former U.S. Treasury secretaries. Mr. Geithner and Mr. Lew served under President Barack Obama, Mr. Paulson under President George W. Bush, and Mr. Rubin and Mr. Summers under President Bill Clinton.
“Six hundred billion dollars per year, and growing: That is two-thirds of total nondefense discretionary spending by the federal government, about what is spent on defense operations, military personnel and procurement, and more than mandatory federal expenditures on Medicaid. It’s also approximately how much unpaid taxes cost the U.S. government. This must change, and it can.
The five of us served as Treasury secretary under three presidents, both Republican and Democrat, representing 17 years of experience at the helm of the department. While we are not in agreement on many areas of tax policy, we believe in the importance of strengthening the tax system to do more to collect legally owed but uncollected taxes — which, left unaddressed, could total $7 trillion over the next decade. We are convinced by the strength of our experiences that more can be done to pursue evasion in the ways outlined by President Biden’s recent proposal to increase the resources and information available to the I.R.S.”
David Lindsay: Bonjour. Viva la tennis a la Internationaux de France de Tennis, aka the French Open. It is more scandalous than the shortages at Starbucks. Naomi Osaka has withdrawn, since she felt depressed and hounded by the new boss Gilles Moretton. He apparently was heavy handed, and deserves a big reprimand. However, he should be allowed to keep his job, since Naomi was wrong not to return his phone calls. Helping the IRS raise more taxes, is a much simpler subject, so here is your lift for the day. Tax cheats must pay! See the article above.
” . . . . The “exceedingly high” part of this question most likely refers to the federal income tax’s “confiscatory” top rates coming out of World War II, which the Eisenhower Administration left in place into the 1960s. During the war, the top “marginal rate” was 94%, but 94% of what? Then as now, income tax rates moved up at distinct break points. In this made-up example, consider a 15% rate up to $25,000, 21% from $25,000 to $50,000, and 25% over $50,000. Those making $50,001 or more won’t pay a quarter of their total income, but rather 15% of the first $25,000, 21% of the next $25,000, and 25% of everything above $50K. That’s why the system is called progressive – the percentage rate progresses upward with income, but the higher percentage applies only to new (marginal) income above each break point. In 1944-45, “the most progressive tax years in U.S. history,” the 94% rate applied to any income above $200,000 ($2.4 million in 2009 dollars, given inflation). . . . ”
“There’s a new tax credit showing up on the Form 1040 this year: The Recovery Rebate Credit. If you didn’t get a stimulus check – or you only got a partial check – then you certainly want to make sure you check out the credit before you file your 2020 tax return.
The recovery rebate tax credit and stimulus checks are joined at the hip. Both the first ($1,200) and second ($600) stimulus checks were simply advance payments of the credit. So, if the combined total of your two stimulus checks (i.e., advance payments) is less than the recovery rebate credit amount, you may be able to get the difference back on your 2020 tax return in the form of a larger tax refund or a lower tax bill. If your stimulus checks exceeded the amount of the credit, you don’t have to repay the difference. Either way, you win!”
Source: What’s the Recovery Rebate Credit? | Kiplinger