The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay

The book is a review of the US taxation history and it's effect on US society as well as comparisons to other countries. The time frame is basically from 1950 to the current time. I am a retired CPA . I have seen these changes first hand and ,to my shame, thought they were for the best. However in the last 20 years, I have come to see the terrible damage done to American families as they tried to deal with stagnate incomes, ever accelerating health care costs and children facing huge educational debts. I saw the growth of tax loopholes which favored the rich and their corporate interest. I saw the undermining of enforcement by the IRS which has given rise to outright tax fraud. The book ends with suggestions for reform that will shock the typical conservative. I am sure they will throw the word socialism at the authors. But to my aging eyes I see a straightforward attempt to address the growth of unbelievable inequality in the last 40 years and the crushing social.problems facing the American middle class. To paraphrase Warren Buffett, there is a class wars going on and the billionaires are winning it.

UC Berkeley economics professors Emanuel Saez and Gabriel Zucman have written a social democratic screed against economic inequality and a concomitant plea for confiscatory taxes on the super-rich. That is taxation not to raise revenue, but rather to reduce the number of billionaires. It is no accident that they have advised both Elizabeth Warren’s and Bernie Sanders’ presidential campaigns.Their discussion involves a data heavy look at the overall U.S. tax system that includes federal, state and local taxation. They conclude that from 1950-1980 the tax system has gone from a progressive one to a largely flat tax system with mildly regressive aspects at the top end. They use adjusted gross income as the basis for their tax rates among the various income groups. By using that metric they exclude transfer payments which bias the results. Further that ignores the very large charitable contributions made by the super-rich which reduces their effective tax rates as defined by the authors. Had they not made those contributions I would assume that the apparent regressivity would give way to progressivity.What Saez and Zucman get right is the need to crack down on corporate tax havens that allow for the transfer of income from high tax to low tax jurisdictions. The tax allocations performed by multi-national corporations have been elevated to a high art by the global accounting firms. Thus it makes a lot of sense to form a global compact to limit this behavior and establish a minimum corporate tax on the order of 20-25%.Domestically they advocate increasing the corporate tax back to the 50% heyday of the 1950s and increasing the top individual rate to 60 %( federal and state). On top of that they propose a 6% national income tax on all income, but they would eliminate state and local sales taxes. On the individual level they would characterize capital gains and dividends as ordinary income while indexing gains to inflation. Because they are French I would characterize their pies de resistance a wealth tax on the order of 2-3% for the richest Americans. As noted above that tax is not for revenue, but rather to penalize and to reduce the number of super wealthy people. My simple question is how is the confiscating of 2-3% of someone’s wealth each year bear any relationship to justice? Think of a large farm where the government takes 20-30 acres away each year from the farmer without compensation. That would be a taking pure and simple.The authors propose using all of the revenue generated from there overhaul of the tax code to fund child care, pre-K, free college and Medicare for all. It sure sounds like Bernie and Elizabeth.What the authors ignore are the second order effects of their ambitious plan. The stock market would meltdown under the weight of lower after tax corporate profits and the forced selling of shares by the super-rich. With that the already shaky finances of public pension plans would crater and the private retirement savings of millions of Americans would take a severe hit. What would they recommend? The answer is obvious: a bailout.Instead of their meat ax approach to the tax code a scalpel would achieve much of what they desire. A moderate increase in upper-income tax rates, elimination of the capital gains treatment of carried interest, elimination of 1031 exchanges for real estate transactions and increasing the corporate income tax rate from 21% to 25%. Such a program wouldn’t cure their bloodlust for billionaires, but would reduce inequality without wrecking the economy.There is one major factual error in the book. The authors state that the top rates for ordinary income and capital gains taxation are 37% and 20%, respectively. That is wrong. The Obamacare taxes make the high income top rates for ordinary income and capital gains, 39.6% and 23.8%, respectively. They are also wrong in attributing the growth in tax shelters following the 1981 Reagan tax cuts to the genius of the tax avoidance industry. That is not quite true. It was the increased depreciation allowances of the Reagan tax cuts coupled with the Garn-St. Germain Act deregulation of the savings and loan industry that enabled the tax shelter industry to flourish. It was given to them on a silver platter. Lastly they note that stock buybacks were illegal prior to 1982. That is not true. Buybacks were legal, but they were highly restricted.Saez and Zucman have offered up a serious, though dubious in my opinion, proposal for radical tax reform. Credible responses are necessary especially if either Warren of Sanders become the Democratic nominee for president.

A concise analysis of who pays taxes, how this has changed over time, current flaws and possible fixes. The way the authors calculate pre-tax income (excluding government transfers, including health premiums, and including a pro-rata share of corporate profits) is unconventional and makes it difficult to draw conclusions without further discussion of this approach. Retirees and households with no children are lumped together with working families which also makes it hard to figure out how different policies might impact each low income subgroup. The policy prescriptions are bold and consequently, if fully implemented, would likely have huge unintended consequences for the economy - especially asset values and employment. I hope to see the authors and others build on this promising academic research.

In short, easily understood chapters, the authors show why there has been this incredible shift of wealth to the top 1% of our population. Although some quibble about the edges of their methodology, there is no denying the basic thrust of their argument. The shift occurred primarily because of the tax code subsidies enjoyed by the very wealthy. There is a lesson politicians need to learn. Tax reform is not about raising taxes on the rich, its about cutting tax subsidies for the wealthy.

This is simply a book about communism. It wants taxation for the sake of taxation and equality for the sake of equality. Its best argument for is that Europe is doing it. Have they ever tried to work with any company in Europe? It's awful. They don't get anything done and their quality is awful. Meanwhile there are other parts of the world working hard, getting rewarded for it, that will soon make Europe a has-been region. Communism has been tried before and has failed miserably. I don't think these guys have any idea how hard it is to be successful and how hard one must work to be successful. They are stripping away the incentives in our society.

Totally misleading analysis - simplification of a complex issue to get progressive headlines. Bad analysis on low income as well as wealthy. And explained arrogantly too boot. Absolute nonsense and misleading.

Outstanding summary of the authors' path-breaking work on tax and (in)justice, should be required reading for all economists and concerned citizens, and a wake-up call for the not-yet concerned. Very relevant for the UK, with many similarities but less rigorous research on our only slightly less extreme inequality and unjust tax system.

Great book. Clear, simple, and very convincing.

Looks like it got banged up in shipping.

Saez and Zucman have written a book about tax policy and managed to make it both understandable and even entertaining. Their main concern is to show how our current US tax policies have made the rich richer. To do this, they provide a history of how the US tax system evolved to what it is today. They also provide some very concrete and influential proposals about how to make the tax system more fair. The footnotes are excellent and they provide a web site with their data and a tax calculator to allow readers to experiment with the parameters of their proposal.

Livro segue o caminho iniciado por Piketi no estudo da origem da desigualdade e caminhos para superação desde que se mostra o grande desafio do capitalismo no inicio do século XXI