Emmanuel Jean Prof Rogers Public Finance 11/17/2012 Income Inequality

The article For Two Economists, the Buffett Rule Is Just a Start by Annie Lowery of two well respected economist Emmanuel Saez and Thomas Piketty. The two have spent the last decade tracking the incomes of the poor, the middle class and the wealthy in countries across the world. In the article, they reported that top American tax rates were much higher, from the 1940's through the 1970's. During this time frame, they point out that marginal tax rates were around seventy to ninety percent, and that the top one percent of the population took ten percent of income. They also mention two different periods of when the taxation on the wealthy was above the current thirty-three percent that it is now. During Roosevelt's term in office the wealthy were taxed at ninety- one percent. During President Reagan's term the wealthy were taxed at fifty percent. The graph that they used in the article shows that during those years where taxing the rich was at its highest, there was also more equality.

Emmanuel Saez and Thomas Piketty are proposing to increase marginal tax rates for upper-income people to a large extent, in order to do something about the extreme income inequality which is hindering the United States economy. They state that government should increase taxes on people who make a lot of money more than what the standard Buffet Rule says. The Buffet Rule says that the government would ensure that individuals who earn more than one million dollars per year pay a minimum tax rate of at least thirty percent. The two

economists believe for a certain amount of income above, 1 million dollars, that income should be taxed up to fifty percent, or seventy percent or even ninety percent, from the current top rate of thirty percent. They believe these drastic measures will decrease the income inequality that exists in the United States.

I have to agree with Mr. Saez and Mr. Piketty on raising the taxes on the wealthy. President Hollande, of France, recently enforced a new plan projected to generate twenty-six billion in tax increases. This plan includes a drastic seventy-five percent tax on incomes over 1 million euros, and eliminates limits on the wealth tax. Hollande believes this will bring the deficit to three percent from 4.5 from the previous year (Fylnn). The change is not much but it is a step in the right direction. I do not believe in just bullying the rich and being a crutch to the poor but it is logical to start taking money from places that would not hurt the future of this nation. Cutting programs that are designed to help the lower class be developed would not have to be an option if taxes were raised on those who can endure it. The two economists illustrating the effects of the taxing the wealthy in the past was a brilliant way to capture debaters attention. If it worked in the past, I believe we can learn from this and try to stay away from the same mistakes.

Works Cited Fylnn, Daniel. "France Wants to Slap Rich with 75 Percent 'super-tax'" Economy Watch. N.p., n.d. Web. 16 Nov. 2012. <http://www.nbcnews.com/business/economywatch/francewants-slap-rich-75-percent-super-tax-6162197>. HENNINGER, DANIEL. "The Obama Rosetta Stone." Wall Street Journal. N.p., 12 Mar. 2009. Web. 16 Nov. 2012. <http://online.wsj.com/article/SB123681860305802821.html>. Lowrey, Annie. "French Duo See (Well) Past Tax Rise for Richest." The New York Times. The New York Times, 17 Apr. 2012. Web. 16 Nov. 2012. <http://www.nytimes.com/2012/04/17/business/for-economists-saez-and-piketty-thebuffett-rule-is-just-a-start.html?pagewanted=all>.