In The Atlantic, Alana Semuels asks a question liberals seem to love asking at any time, in any situation: "Is the U.S. due for radically raising taxes for the rich?"
The article, featuring comments from several liberal economists, leaves the reader with the impression that the answer is objectively "yes."
But the argument that the rich should pay more in taxes is often based on the faulty premise that the rich don't pay their fair share of taxes. This is something Hillary Clinton mentioned in her speech at the Democratic National Convention. Under her presidency, she promised "the super-rich are going to start paying their fair share of taxes."
It's reasonable to think that a certain income group should pay roughly the same portion of all federal taxes as their portion of before-tax income earned in a given year.
According to figures from the nonpartisan Congressional Budget Office, the rich are the only group who pay more than their fair share in federal taxes. The top 20 percent of the income spectrum earn about half of the country's income but pay almost 70 percent of all federal taxes. Every other income quintile earns a larger share of the country's before-tax income than they pay in federal taxes.
"Fair share" rhetoric aside, it's still inadvisable to raise taxes on the rich because of the damage it would inflict on low-income Americans. Take a look at two possible tax hikes analyzed by the Tax Foundation.
Without any other changes to the tax code, what if the top marginal income tax rate were raised to 45 percent from the current 39.6 percent? Only the rate paid by those earning $415,050 and more (who file as single) would rise. But the tax hike would kill 279,000 jobs and slow economic growth, though only by a measly -0.5 percent over roughly 10 years.
The 1 percent would see their after-tax incomes fall by 3 percent, while the bottom 20 percent would see their after-tax incomes fall by 0.5 percent. Inequality would decline, but everyone would be worse off.
In theory, the new revenue from the tax could be redistributed to the bottom 20 percent through various welfare programs, but that would only make them increasingly dependent on government instead of boosting economic growth to create job opportunities.
A new 49 percent tax bracket hitting those at $750,000 and above would create a similar situation. About 350,000 jobs would be killed and economic growth would slow by 0.7 percent spread out over 10 years. The 1 percent would see their incomes fall by 4 percent, while the bottom 20 percent would see theirs drop by 0.6 percent.
Oddly enough, the Semuels piece in the Atlantic also claims that "in the 19th century, the United States was governed by the same type of free-market paradigm that rules the country today: Leave it to the market to sort everything out." (It's unclear if Semuels is making the claim, or Marshall Steinbaum of the Roosevelt Institute, who was referenced in the preceding sentence).
There are many ways to show a "free-market paradigm" doesn't rule the country today, but focus on this one: There are more than 175,000 pages in the Code of Federal Regulations today. It didn't even exist until 1937. It's safe to say the 19th century was a little bit different than the rules the economy exists under today.
Jason Russell is a commentary writer for the Washington Examiner.