The Marginal Tax Bracket Is an Enemy of Democracy
The marginal tax bracket at the heart of our income tax system obfuscates the key question about taxes in a democratic society: Who pays what? In the 1930s, France's Popular Front government had a solution — until it was dismantled by the right-wing Vichy regime.
Léon Blum speaks at the 1932 socialist party (SFIO) congress. (Bibliothèque nationale de France)
On Twitter, the mysterious and pseudonymous James Medlock (who tweets about lefty policy stuff, but is also some sort of cult figure?) recently hosted a group commiseration session about a malady that is shockingly widespread, but about which too many of us remain heedlessly ignorant.
I’m speaking of the Marginal Rate Delusion.
It turns out that vast swathes of adult Americans — including some of the finest citizens in your community: teachers, doctors, businessmen — do not understand how our marginal-rate tax system works. They think that if you’re in the 24 percent tax bracket, you pay 24 percent of your income in taxes; then if you get “pushed” into the 32 percent bracket, you have to pay 32 percent of your income.
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