Tax Burden Distribution

As I've commented on previously, there is a large effort underway to "reform" the tax code. Of course, you'll hear a lot about how these "reforms" will lead to more money for the middle class; however, you have to take a lot of "trickle down" economic theory on faith to believe that any of that money will ever reach the middle class.

What is guaranteed in this "reform" effort, of course, is that corporate taxes and inheritance taxes will go down considerably. So, if you stand to inherit more than $11,000,000 then you are guaranteed to benefit from this plan. If you work for a living, you have to take it on faith that corporations will take their newfound money and, contrary to experience from the past 20 years, raise wages.

That is the easy part.

The more interesting part, to me, is the distributional effect this will have. It seems to me that our government's priorities should be determined by a combination of our moral compass and our sense of "he who pays, plays."

Here is an interesting data point. In 1952, the corporate income tax accounted for 33% of federal tax collections. Today it accounts for 9%.

As an interesting corollary, here is a graph showing corporate profits and wages as a percentage of all money made in America in a given year.

Now, I'm not statistician, but it appears to me that wages (the red line) have consistently shrunk, whereas profits have consistently risen.

It's almost as though we have actual evidence that trickle-down economics is a hoax and has no basis in reality. I mean, if you look at the chart above, it would almost lead you to believe that corporations don't actually use increased profits to pay increased wages! Amazing what happens when you look at actual statistics and facts and cut through the rhetoric and talking points!

However, I want to go one level deeper.

If corporations are only paying 9% of federal tax collections, why is it that so much American military might is expended to keep corporate assets, from oil rigs to container ships to intellectual property, safe?

If they're only paying 9% of the tab, why do they get so much of the benefit? Why is it that all the talk as far as paying for these corporate tax cuts is centered on cutting social security or medicare? The people who would get their benefits cut are the ones who have paid the freight for their benefits!

Just think about that the next time Sen. Empty Suit Toy Soldier Todd Young or Vice President Taliban Cotton Mather Pence talks about "reforming" the tax code.