The Big Fib About the Rich and Taxes
19th October 2019
Last week, several prominent journalism outlets publicized a bombastic claim about tax policy in the United States. According to analysis by Berkeley economists Gabriel Zucman and Emmanuel Saez, the bottom 50 percent of earners in the United States now pay a higher overall tax rate than multimillionaires. The New York Times and Washington Post trumpeted this claim as if it was settled fact, even though the study it was based upon has yet to go through scholarly peer review.
Yet as we also saw, Saez and Zucman’s numbers immediately came under intense scrutiny — including from high quarters in the economics profession. Their overall depicted trend in tax rates conflicted with better-established estimates from the Congressional Budget Office (for federal rates) and the Institute on Taxation and Policy (for state and local rates) — which, when combined, reveal an unambiguously progressive distribution of the tax burden.
Saez and Zucman’s supporters nonetheless insisted that their alternative estimates would be vindicated with the release of their new book, The Triumph of Injustice. After an unconventional rollout that included providing selected journalists with privileged access to unvetted stats, the Saez-Zucman data files are finally available. Far from demonstrating the superiority of their new estimates, the statistical release has only cast further doubt upon their methods.