People across all income brackets believe the highest income earners should pay more tax. But why has the opposite happened despite the overwhelming support?
Oh that’s an easy question to answer. Those with the most wealth bribe the lawmakers so this doesn’t happen.
I would assume the easy answer is “propaganda”
Is “Because the people who actually write tax law don’t want it” too simple an answer?
Because people vote for it. If you’re voting republicans into power every person who isn’t a complete moron knows they will cut taxes on rich people. Every. Single. Time.
So while people may want higher taxes on the rich they apparently don’t want them that badly.
tax law almost always does have higher taxes on high earners
they just can afford to exploit the system an avoid much of it
Because these polls don’t ask how much the voter cares about this policy and doesn’t show if they would sacrifice voting to support other policies (abortion) to support this one.
That is to say, while most voters want higher taxes on the wealthy, they aren’t willing to compromise on other policies to make it so.
As long as you have a first past the post system which doesn’t allow for ranked choice voting, you will always be confined to representatives who toe the line for the two major parties.
Edit: It has been brought ot my attention that this study was specific to Norway, as such my comments are inappropriate and were made with the misunderstanding that this study was with regards to the US.
The biggest reason is that the wealthy invest in politicians via campaign contributions. Another reason is that successful politicians become rich, and they care about maintaining that wealth.
The real reason is because those ultra high wage earners are getting much of their income from capital gains which are taxed differently. This first graph makes it seem as though the income tax rate starts to decrease after $220,000 which it doesn’t.
Maybe it’s time for a more progressive tax rate on capital gains
According to your own graphs, it does match for labor income. Looks like the problem is with how capital income is taxed instead.
And that’s why as earners get higher on your first graph, the black line starts to trend back down. Because those high of earners are earning mostly capital income.
There is hesitancy to tax capital income higher too as that is regarded as someone’s savings (so some would argue it’s already been taxed), then is very good for the economy to invest those savings and create more economic output.
Capital income has already been taxed. It’s a tax on top of the tax.
Let’s say you own a company called Company A.
Company A makes $10M this year, but had to spend $8M in expenses (rent, supplies, etc.).
Its profit is $2M and it pays 21% corporate income taxes on that. So that’s roughly $400k in taxes.
Then, as the the owner, you take a dividend (which is basically just cashing out a bit) of the remaining $1.6M.
You will be taxed AGAIN on the $1.6M at your capital gains rate (up to 20%). That’s another ~$300k in taxes.
In total, the corporation (which you own) and you individually paid $700k in taxes on a profit of $2M.
Companies typically have multiple owners, but the same principle apples.
Edit: as has been pointed out to me, while my data concerns US taxpayers, OP’s concerns Norway. I don’t know enough about the Norwegian tax system to really comment on their rates.
Actual 1% income earner so can answer this well i think
The reason is that working people make a different KIND of income than the truly affluent.
My partner and I make a very large income (in the $1M range), but that is almost all regular old salary W2 income. Our tax rates are REALLY HIGH. Combined federal + state + local income marginal tax rate is about 60%. So, for people like us, the system does work about in the way people say they want it to work.
The truly affluent people though, often derive income from much more tax efficient ways to earn it. A lot rely largely on business profits and capital gains. These things are much harder to tax than salaried income, and economists tell me that taxing capital gains at high rates would be bad for the economy. Plus, there is a limit. US actually has REALLY HIGH taxation of capital assets. Rich people can and often do move to lower tax places to avoid our high capital gains assets. For example, Belgium (which has very high taxes on labor income), has 0% taxes on capital gains. If you are not a US citizen and can make your way to Belgium, you can save a lot of money in taxes. This is BEFORE you start talking about legally murky and downright illegal (but hard to prove) “wealth management” strategies that rich people and their bankers in far flung island nations employ to hide their true wealth.
Ultimately, it’s really hard to tax the truly affluent. There are just not that many people out there who make $5M or $10M in regular old W2 wage income. It does piss me off that Warren Buffet – while likely paying higher taxes than his secretary these days – pays about half the tax rate that I pay. But i don’t know how you would change that, operationally speaking.
Because this data is misleading, comparing capital income with other incomes more common in lower brackets.
Hey OP, it’s kinda weird that you didn’t mention that this study took place in Norway. And it’s really weird that you’re joining in the comments as if it were only about *the default country*.
The real answer is because the wealthy mostly earn their money through capital gains, not from salary. We charge lower tax rates on capital gains because the “basis,” the capital itself, has already been taxed and it is somewhat unfair to tax someone again just for owning something at the same rate as for earning something. We do it anyway, just at a lower rate and we give a discount if you hang onto it for a longer period (long term capital gains.) This also encourages investment.
What do you mean the opposite has happened? The top 10% of income earners pay like 75% of the tax collections in the US. The bottom 50% of earners pay effectively zero tax with the EITC.
The tax system is progressive too, so the more you make the higher your tax rate goes.
So there’s actually been studies that have proven that the policy preferences of rich Americans get enacted into law, while the policy preferences of the average American does not. See
Gilens, M., & Page, B. I. (2014). Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens. Perspectives on Politics, 12(3), 564–581.
DOI: 10.1017/S1537592714001595
They do pay more tax.
In the US at least:
* **Top 1%:** In 2022, the top 1% of earners paid 40.4% of all federal income taxes. This is significantly higher than their share of total income, which was 22.4%.
* **Top 10%:** The top 10% of earners were responsible for 76% of all income taxes paid in 2022.
* **Top 25%:** The top 25% paid 89% of all income taxes in 2022.
Why don’t people believe higher income people pay more taxes than lower income folk? US doesn’t have a revenue problem, it has a spending problem.
They say that Knowledge is power
but you still require licenses and certificates… and someone to foot the bills, nerds.
Money is the power that can control all types of people who stay around people, eventually.
I think at one point it was supposed to represent merit I think the games meta has been broken though.
You’re forced to do the silly dance of society
Unless you’re willing to be a frontier-person or savage which is unrealistic and rarely preferable when most can manage to find manage some modicum of a niche in the clustercluck of systems that are people.
Even then you’re living on land you probably can’t claim.
TLDR: Currency is a pluripotent tool which people can use to say “screw the rules, I have money.” Or “that’s just like uh your opinion, man.”
Ideaology vs pragmatism. I also share the same believe until I become that person. Vast majority of you will too. It’s human nature combined with the fact most of that “wealth” isn’t cash, but tax is.
These are fantastic visualizations.
Everyone else can’t afford lobbyists.
Because what they actually mean is “People in MY specific income bracket shouldn’t be paying taxes”
Really?
The simple answer is the golden rule… those with the gold make the rules.
We don’t have the gold
Because conservative politicians have successfully convinced enough people that culture wars are more important than reducing income inequality, and that any efforts to try are actually are actually socialist policies. This is coupled with the right-wing propaganda machine and a very misinformed electorate.
It’s crazy, but despite what you may have heard, Trump is not a populist; he’s a corporatist in authoritarian clothing. As for the rest of Congress and previous presidents, who do you think pays to get them elected?
Because capitalism is a fucking joke.
Simple the politicians do not work for the people. They accept bribes in the forms of CPAC funding since our ineffective Supreme Court voted for citizens united which enabled unlimited political spending.
Because saying so gives you votes and sympathy, even if you are lobbying for the opposite.
In other words, because human beings suck
Because the average American votes on vibes and personality, rather than actual policy. The majority of Americans get their information from social media
34 comments
Oh that’s an easy question to answer. Those with the most wealth bribe the lawmakers so this doesn’t happen.
I would assume the easy answer is “propaganda”
Is “Because the people who actually write tax law don’t want it” too simple an answer?
Because people vote for it. If you’re voting republicans into power every person who isn’t a complete moron knows they will cut taxes on rich people. Every. Single. Time.
So while people may want higher taxes on the rich they apparently don’t want them that badly.
tax law almost always does have higher taxes on high earners
they just can afford to exploit the system an avoid much of it
Because these polls don’t ask how much the voter cares about this policy and doesn’t show if they would sacrifice voting to support other policies (abortion) to support this one.
That is to say, while most voters want higher taxes on the wealthy, they aren’t willing to compromise on other policies to make it so.
As long as you have a first past the post system which doesn’t allow for ranked choice voting, you will always be confined to representatives who toe the line for the two major parties.
Edit: It has been brought ot my attention that this study was specific to Norway, as such my comments are inappropriate and were made with the misunderstanding that this study was with regards to the US.
The biggest reason is that the wealthy invest in politicians via campaign contributions. Another reason is that successful politicians become rich, and they care about maintaining that wealth.
The real reason is because those ultra high wage earners are getting much of their income from capital gains which are taxed differently. This first graph makes it seem as though the income tax rate starts to decrease after $220,000 which it doesn’t.
Maybe it’s time for a more progressive tax rate on capital gains
According to your own graphs, it does match for labor income. Looks like the problem is with how capital income is taxed instead.
And that’s why as earners get higher on your first graph, the black line starts to trend back down. Because those high of earners are earning mostly capital income.
There is hesitancy to tax capital income higher too as that is regarded as someone’s savings (so some would argue it’s already been taxed), then is very good for the economy to invest those savings and create more economic output.
Capital income has already been taxed. It’s a tax on top of the tax.
Let’s say you own a company called Company A.
Company A makes $10M this year, but had to spend $8M in expenses (rent, supplies, etc.).
Its profit is $2M and it pays 21% corporate income taxes on that. So that’s roughly $400k in taxes.
Then, as the the owner, you take a dividend (which is basically just cashing out a bit) of the remaining $1.6M.
You will be taxed AGAIN on the $1.6M at your capital gains rate (up to 20%). That’s another ~$300k in taxes.
In total, the corporation (which you own) and you individually paid $700k in taxes on a profit of $2M.
Companies typically have multiple owners, but the same principle apples.
Your premise is wrong.
https://taxfoundation.org/data/all/federal/latest-federal-income-tax-data-2024/
Edit: as has been pointed out to me, while my data concerns US taxpayers, OP’s concerns Norway. I don’t know enough about the Norwegian tax system to really comment on their rates.
Actual 1% income earner so can answer this well i think
The reason is that working people make a different KIND of income than the truly affluent.
My partner and I make a very large income (in the $1M range), but that is almost all regular old salary W2 income. Our tax rates are REALLY HIGH. Combined federal + state + local income marginal tax rate is about 60%. So, for people like us, the system does work about in the way people say they want it to work.
The truly affluent people though, often derive income from much more tax efficient ways to earn it. A lot rely largely on business profits and capital gains. These things are much harder to tax than salaried income, and economists tell me that taxing capital gains at high rates would be bad for the economy. Plus, there is a limit. US actually has REALLY HIGH taxation of capital assets. Rich people can and often do move to lower tax places to avoid our high capital gains assets. For example, Belgium (which has very high taxes on labor income), has 0% taxes on capital gains. If you are not a US citizen and can make your way to Belgium, you can save a lot of money in taxes. This is BEFORE you start talking about legally murky and downright illegal (but hard to prove) “wealth management” strategies that rich people and their bankers in far flung island nations employ to hide their true wealth.
Ultimately, it’s really hard to tax the truly affluent. There are just not that many people out there who make $5M or $10M in regular old W2 wage income. It does piss me off that Warren Buffet – while likely paying higher taxes than his secretary these days – pays about half the tax rate that I pay. But i don’t know how you would change that, operationally speaking.
Because this data is misleading, comparing capital income with other incomes more common in lower brackets.
Hey OP, it’s kinda weird that you didn’t mention that this study took place in Norway. And it’s really weird that you’re joining in the comments as if it were only about *the default country*.
The real answer is because the wealthy mostly earn their money through capital gains, not from salary. We charge lower tax rates on capital gains because the “basis,” the capital itself, has already been taxed and it is somewhat unfair to tax someone again just for owning something at the same rate as for earning something. We do it anyway, just at a lower rate and we give a discount if you hang onto it for a longer period (long term capital gains.) This also encourages investment.
What do you mean the opposite has happened? The top 10% of income earners pay like 75% of the tax collections in the US. The bottom 50% of earners pay effectively zero tax with the EITC.
The tax system is progressive too, so the more you make the higher your tax rate goes.
So there’s actually been studies that have proven that the policy preferences of rich Americans get enacted into law, while the policy preferences of the average American does not. See
Gilens, M., & Page, B. I. (2014). Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens. Perspectives on Politics, 12(3), 564–581.
DOI: 10.1017/S1537592714001595
They do pay more tax.
In the US at least:
* **Top 1%:** In 2022, the top 1% of earners paid 40.4% of all federal income taxes. This is significantly higher than their share of total income, which was 22.4%.
* **Top 10%:** The top 10% of earners were responsible for 76% of all income taxes paid in 2022.
* **Top 25%:** The top 25% paid 89% of all income taxes in 2022.
Why don’t people believe higher income people pay more taxes than lower income folk? US doesn’t have a revenue problem, it has a spending problem.
It would help if you clarify that this was a study of Norwegian taxpayers. This does not hold true of American taxpayers, and may not hold for many others.[https://shivamber.com/this-small-move-transforms-federal-income-taxes-to-help-millions/](https://shivamber.com/this-small-move-transforms-federal-income-taxes-to-help-millions/)
Because rich people have made sure no one knows what they actually pay, so the fact they have lower tax rates is likely unknown.
Short answer: Citizens United v. FEC
*“The preferences of the average American appear to have only a miniscule, near-zero, statistically non-significant impact upon public policy.”* -[Gilens and Page](https://www.cambridge.org/core/journals/perspectives-on-politics/article/testing-theoriesof-american-politics-elites-interest-groups-and-averagecitizens/62327F513959D0A304D4893B382B992B)
They say that Knowledge is power
but you still require licenses and certificates… and someone to foot the bills, nerds.
Money is the power that can control all types of people who stay around people, eventually.
I think at one point it was supposed to represent merit I think the games meta has been broken though.
You’re forced to do the silly dance of society
Unless you’re willing to be a frontier-person or savage which is unrealistic and rarely preferable when most can manage to find manage some modicum of a niche in the clustercluck of systems that are people.
Even then you’re living on land you probably can’t claim.
TLDR: Currency is a pluripotent tool which people can use to say “screw the rules, I have money.” Or “that’s just like uh your opinion, man.”
Ideaology vs pragmatism. I also share the same believe until I become that person. Vast majority of you will too. It’s human nature combined with the fact most of that “wealth” isn’t cash, but tax is.
These are fantastic visualizations.
Everyone else can’t afford lobbyists.
Because what they actually mean is “People in MY specific income bracket shouldn’t be paying taxes”
Really?
The simple answer is the golden rule… those with the gold make the rules.
We don’t have the gold
Because conservative politicians have successfully convinced enough people that culture wars are more important than reducing income inequality, and that any efforts to try are actually are actually socialist policies. This is coupled with the right-wing propaganda machine and a very misinformed electorate.
It’s crazy, but despite what you may have heard, Trump is not a populist; he’s a corporatist in authoritarian clothing. As for the rest of Congress and previous presidents, who do you think pays to get them elected?
Because capitalism is a fucking joke.
Simple the politicians do not work for the people. They accept bribes in the forms of CPAC funding since our ineffective Supreme Court voted for citizens united which enabled unlimited political spending.
Because saying so gives you votes and sympathy, even if you are lobbying for the opposite.
In other words, because human beings suck
Because the average American votes on vibes and personality, rather than actual policy. The majority of Americans get their information from social media
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