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Does the U.S. Have an Unusually Progressive Tax System?

Poor Jonathan Chait tries to be nice to Veronique de Rugy.

Could she possibly be right? Is the U.S. tax system unusually progressive?


Http www oecd org dataoecd 40 58 49170768 pdf

Source: OECD, Divided We Stand: Why Inequality Keeps Rising

Looks to me like only 6 OECD countries have less progressive systems, and 21 OECD countries have more progressive systems…

As Chait writes:

Jonathan Chait:

I Will Try To Be Nice This Time: De Rugy wrote a column arguing that the U.S. has a more progressive tax system because rich Americans pay a higher share of the tax burden than do rich people in other countries:

Contrary to common belief, the United States already has a more progressive tax system than do the most industrialized democracies worldwide. The nearby chart uses data from a recent report by the Organization for Economic Cooperation and Development on the share of taxes (both personal income and payroll taxes combined) paid by the richest 10 percent of households in 24 industrialized countries. The bars represent the share of the total taxes collected that are paid by top earners in these 24 countries.

The richest 10 percent of U.S. households (those making $112,124 or more) contribute a greater share of taxes (45.1 percent of all income taxes) than their counterparts in any other industrialized nation.

This widely-circulated argument is completely fallacious…. If rich people earn a far larger share of the income in the U.S., which they do, then they may pay a higher share of the tax burden even if the U.S. income tax system is less regressive. I don’t see how anybody can deny that. Indeed, I don’t see de Rugy or her copious defenders even attempting to deny it. Instead, de Rugy keeps writing multiple replies attempting to change the question.

One thing she’s doing is suggesting other measures of progressivity that might show the U.S. is extremely progressive. That is an interesting question. It’s not, however, the subject of the dispute…. Clive Crook argues… [that] the U.S. tax code really is unusually progressive. That’s fine. But that is not the subject of the dispute…. [I]f Clive Crook were to argue that he is the most handsome man in the world because he owns an Oxford shirt, and I were to respond that this is a fallacious argument, then it would be beside the point if Crook summoned some other measure to prove he really is the most handsome man in the world…. You can’t claim that the proportion of taxes paid by the rich is a good measure of the progressivity of the tax code…. Now, if de Rugy’s frantic efforts to change the subject amount to a tacit confession that her original argument was false, and she will endeavor to cease recirculating (she has done it before) this totally wrong claim, then that would be very nice…

If you want to read more than you probably really want to know about changes in redistribution in the OECD over the past two decades, you can go here. No, the United States is not and has not been unusually progressive.