- In the United States, the share of total pre-tax income accruing to the top 1% has more than doubled, from less than 10% in the 1970s to over 20% today (pdf). A similar pattern is true of other English-speaking countries. Contrary to the widely-held view, however, globalisation and new technologies are not to blame. Other OECD countries, such as those in continental Europe, or Japan have seen far less concentration of income among the mega rich.
Part of the problem is that we see higher taxes as being about more money for the government. That's not the case at all, as this article correctly points out, and as I've argued here many times. Higher taxes for the wealthy are for the explicit purpose of disincentivizing companies to pay their top execs ridiculous wages. In the 1950s, the CEOs of top companies made somewhere around (and I don't have the exact numbers in front of me, so I'm ballparking) 30-35 times what an average wage earner made. Not bad. These days, it about 300 times what the company's average wage earner makes. If those execs had to pay 80% tax on that pay, they would never give themselves those salaries in the first place, because it would just be their company writing a donation to Uncle Sam. We need to change the debate about taxes from one of debits and credits for the government (as we all hate seeing the gov't waste money) to one of economic stability, which I believe higher tax rates would help achieve.