Here’s an op-ed at USA Today by Sam Pizzigati of the Institute for Policy Studies arguing that we should double the minimum wage and the top marginal tax rate:
A century ago, Americans faced an income and wealth distribution even more top-heavy than today’s. But Americans trimmed the super rich down to democratic size. Our forbears had the courage, in short, to confront concentrated wealth and power. Do we?
One test: Berkeley economist Emmanuel Saez says our top marginal tax rate could hit 80% — double the current top rate — without negatively impacting anybody but the super rich. In the two decades after World War II, our top tax rate hovered around 90%.
Another test: Fast-food workers are pushing for a $15 hourly minimum wage. If the federal minimum had risen since the 1960s as fast as the incomes of the top 1%, that minimum today would exceed $22.
An 80% top tax rate, a $15 minimum wage. Simple steps. Let’s take them.
I’ve read any number of articles from economists to the effect that small increases in the minimum wage don’t have a great deal of effect on employment. That doesn’t appear to be a consensus view (the consensus view remains that the demand for labor continues to be elastic) but it is a mainstream view. Is doubling the minimum wage “small”?
I also think that, as long as Congress insists on maintaining what some call loopholes and others call tax expenditures (the source of a great deal of Congress’s influence), Mr. Pizzigati would be appalled at how little effect an 80%, 90%, or 95% top marginal tax rate would have. There’s a big difference between the top marginal rate which has bounced all over the place over the period of the last 80 years and the effective tax rate which has been remarkably steady in the low twenties.
How Mr. Pizzigati will convince Congress of his plan when they have refused to increase the top marginal tax rate beyond 40% is beyond me.