Mike Stroup on Tax Progressivity
Mike Stroup, who used to be my colleague at the Naval Postgraduate School and who is now at Stephen F. Austin State University in Nacogdoches, Texas, has done a pithy 2-pager for the National Center for Policy Analysis. It’s titled, “Tax Code Became More Progressive After the Bush Tax Cuts.”
Of course, the word “progressive” sounds good: it was very clever of those who wanted higher tax rates on people with higher incomes to label the results “progressive.” When I teach about taxes, I used the term “graduated” rather than “progressive.” It’s not entirely neutral, either, but it’s more neutral.
In his piece, Stroup uses various methods to judge progressivity and finds that under all methods, the income tax has become more progressive over the years. Check out his Tax Progressivity Index in Figure 2.
Interestingly, most of this was agreed to by Republican presidents starting with Ronald Reagan.
One critical note: Stroup, like almost everyone who writes about these issues, conflates income and wealth. He refers to poor people and rich people, but has no data on wealth: all his data are on income.
HT to John Goodman.