This story is a partnership between the Center for Public Integrity, a newsroom that investigates inequality, and Bloomberg Tax, a news organization that provides legal and regulatory information for tax professionals and their advisers.
A dense fog rolling in off the Pacific enveloped President Ronald Reagan’s majestic 688-acre ranch, high in the hills above Santa Barbara, California.
Visibility was limited, but a crowd of cameramen, photographers and reporters were gathered on that day in 1981 to record the president signing a major piece of legislation.
Wearing jeans, a faded dungaree jacket and cowboy boots, Reagan strolled out of the adobe farmhouse where he and first lady Nancy Reagan were vacationing to a table on the gravel driveway below the house. As he slid into an old leather chair, Reagan flashed his radiant smile to the journalists awaiting the ceremony.
He had much to smile about. Stacked on the table was ERTA, the 185-page Economic Recovery Tax Act of 1981, whose passage fulfilled a campaign promise to cut taxes in a big way.
Signing the bill repudiated everything he had once believed in as a New Deal supporter. ERTA slashed personal, corporate and estate taxes and was stuffed with other tax favors for high-net-worth individuals and corporations. The tax cuts carved a $750 billion hole in the federal budget, prompted cuts in multiple public programs and added to the deficit. The cuts, spread over six years, totaled $2.4 trillion in today’s dollars — basically the cost of the Biden administration’s multi-year, scaled-down Build Back Better bill that never made it out of Congress.
But that was just the beginning. The bill signing on that foggy day set in motion a trend in tax policy that is supercharging America’s escalating income inequality. In the past four decades, Congress after Congress has cut taxes on the richest people and corporations — billions of dollars that would otherwise have gone to the federal till for spending that could help the rest of the public get ahead.
Along the way there were some tax increases, most recently the Inflation Reduction Act signed by President Joe Biden in August that levied a 15% minimum tax on corporations and a 1% excise tax on stock repurchases by public companies. That law was a modest but significant breakthrough for the Democrats after years of Republican-driven tax cuts.
To some, the value of the reforms isn’t just monetary: “They will help restore the public’s confidence in the fairness of our tax system,” said Frank Clemente, executive director of Americans for Tax Fairness, a coalition that advocates for progressive taxation.
These increases notwithstanding, the trajectory over the past two generations has been in the opposite direction.
In 1980, the top income tax rate for individuals was 70%. Today it’s 37%.
The political forces behind that seismic shift haven’t stopped pushing for more. Already, House Republicans are proposing to extend or make permanent some of the most recent tax cuts.
Setting the pattern
Before the income tax was enacted in 1913, average Americans paid the bulk of federal taxes through levies on imported goods. Democrats succeeded in passing the income tax as a way to compel the wealthy to pay more of the cost of running the national government.
Until World War II, the income tax was levied on only the richest Americans. Even after that, the system was designed so people with more money paid higher rates — much higher for the wealthiest.
Elected officials, largely Republicans with some assists from Democrats, have spent the past four decades pulling that system apart.
They’ve tucked large breaks for the rich into proposals with small cuts for millions of other Americans, effectively disguising the main beneficiaries. They’ve promoted tax cuts with claims about economic benefits that have not panned out.
“It’s vastly oversold that tax cuts will generate job and economic growth,” said William Gale, co-director of the Urban-Brookings Tax Policy Center. “When you cut taxes for the upper income, you give them more after-tax income, but you don’t do anything for growth.”
The nonpartisan Congressional Research Service reached essentially the same conclusion in 2012 that tax cuts don’t spur growth but do increase income inequality. After Senate Republicans heatedly objected to the report, CRS withdrew it.
ERTA charted the course in 1981. It cut the top tax rate from 70% to 50% on so-called unearned income — dividends from stocks and interest on bonds and savings. While modest tax breaks sprinkled throughout the bill affected millions of taxpayers, the top rate cut had just one constituency. Only the richest 2% of taxpayers were subject to taxes up to the 70% rate.
Lowering that rate had long been a Republican goal, but the party’s lawmakers had been reluctant to propose it in ERTA for fear that voters would see them as favoring the rich. Instead, it was the Democrats who proposed it. It was a trade, a way to get Republican support for other provisions in the bill.
ERTA gave the wealthiest Americans who received dividend and interest payments a hefty yearly tax cut of $6.7 billion, the equivalent of $21 billion today. Out of 95 million taxpayers who filed that year, this bounty went to just 82,000: the richest sliver of the top 1%.
People in this group who received $250,000 in dividends owed $175,000 in taxes on them for the 1981 tax year. ERTA gave them a tax cut of $50,000 the next year — more than twice what the majority of American families lived on at the time. It was a gift that kept giving, year after year.
To fully understand the amount of money involved, think of it this way:
If the 70% rate were still on the books, taxpayers with more than $1 million in income in 2019 could have owed $87.9 billion more in taxes that year, according to a Center for Public Integrity analysis of IRS data. That’s more than enough money to rebuild and repair all the bridges and water systems across the country slated for work under the Infrastructure Investment and Jobs Act passed by Congress in 2021.
Cutting taxes for the rich over the past 40-plus years has had a huge impact, leaving less money for public programs that benefit millions of Americans while enriching a tiny percentage of the population. Where once the code strove for a certain balance — the more you earned, the more you paid — the rates have been reduced so much that there’s not nearly as much difference now between the top tax rate a billionaire investor pays on their income and what a middle-class salaried professional pays on theirs.
Income inequality in America is at heights not seen for a century. A variety of factors have contributed, including the erosion of good-paying manufacturing jobs, deregulation, a weakened trade union movement and the elimination of pensions and other rungs in the safety net. But taxes have been a principal engine of worsening economic inequality simply because the wealthy, thanks to their success in Congress, now have more money — to buy stocks, invest in real estate, build megayachts, blast off into space and make campaign contributions to politicians so the cycle isn’t interrupted.
It wasn’t always this way.
For decades leading up to 1980, all incomes from top to bottom rose at nearly the same pace. But that changed dramatically afterward. While median family income was largely stagnant, top incomes soared.
In 1980, the top 4% of taxpayers earned as much as the bottom 39%. By 2019, the top 4% earned as much as the bottom 57%, according to a Public Integrity analysis of the most recent IRS data.
As more money flowed upward, the gap in accumulated wealth widened. In 2019, the top 10% of Americans had three times the wealth of everyone else in the country combined.
The pandemic greatly exacerbated the trend. The stock market has been volatile this year, but a June study by Americans for Tax Fairness and the Institute for Policy Studies concluded that 745 U.S. billionaires had grown $2.1 trillion richer since the start of COVID-19.
The tax reform game
Five years after ERTA, tax cutters triumphed again.
Two Democrats, Sen. Bill Bradley of New Jersey and Rep. Richard Gephardt of Missouri, cosponsored bills to wipe out abusive tax shelters in exchange for lowered tax rates.
Reagan embraced the plan as a way to further gut progressive taxation. As it worked its way through Congress, the Tax Reform Act of 1986 was widely hailed by Democrats and Republicans.
On the plus side, the law for the first time taxed long-term capital gains at the same rate as wages and salaries in addition to restricting tax shelters.
“[The bill] will close the loopholes and curb the tax shelters that giant corporations and wealthy individuals have used for decades to escape their responsibilities and avoid paying taxes,” Rep. Robert A. Borski, a Pennsylvania Democrat, told his House colleagues on Sept. 25, 1986.
But overlooked in the euphoria was the price paid in other parts of the legislation. It lowered the top rate on wages, salaries and all other personal income from 50% to 28%, the largest single drop in the history of the federal income tax.
Proponents contended that was justified because few wealthy people were paying the top rate, thanks to tax shelters.
However, the data shows that not every wealthy taxpayer was loaded with tax shelters, and the 1986 act gave them a big break.
How the top tax rate works
Under the federal system, people pay a larger percentage in taxes as their income goes up. The more you make, the higher your tax rate.
But the highest rate you pay applies only to the last portion of your income — not your total income. The highest federal tax rate today is 37%, but on average, wealthy taxpayers pay only 25.6% on their total income, according to the IRS.
The tax code groups taxpayers according to their incomes into categories called tax brackets. The lowest bracket for single filers in 2022, applying to income up to $10,275, is 10%. The highest bracket taxes income above $539,900.
The system is considered progressive, especially when compared to states that tax their residents at the same rate, regardless of income. Even so, the federal system is far less progressive than it once was. Today there are only seven federal tax brackets, ranging from 10% to 37%. In 1970, there were 25 — from 14% to 70%.
Today, an upper-income person pays the same tax rate on any income earned above $539,900 as a wealthy investor would pay on millions of dollars in income above that amount. Decades ago, that wasn’t the case.
In 1985, all taxpayers reporting income of $1 million and up had an average income tax of $910,931, according to IRS data. In 1988, the first year showing the full impact of the law, that same group paid $226,000 less on average.
For Reagan, the low rates were the heart and soul of the bill.
“Our Founding Fathers … never imagined what we’ve come to know as the progressive income tax,” Reagan said while signing the bill on Oct. 22, 1986. He said it “struck at the heart of the economic life of the individual, punishing that special effort and extra hard work that has always been the driving force of our economy. … I feel like we just played the World Series of tax reform — and the American people won.”
Some won much more than others.
IRS data shows that taxpayers with upwards of $40,000 in income received on average a modest tax cut of $603 a year. Upper-income Americans earning $500,000 to $1 million took home an average of $73,617. And those at the top received far more.
To those who knew how the benefits of tax reform had been oversold to average Americans, this came as no surprise. Daniel Halperin, a former assistant treasury secretary, told a congressional committee as the bill was being considered: “Over 40% of American families will either have a tax increase or no change.” People with the highest incomes, he said, would be “the biggest winners.”
Republicans claimed that the 1980s tax cuts would stimulate so much economic activity that tax receipts and budgets wouldn’t suffer. But by the end of the eight-year Reagan presidency, revenues were an unprecedented $1.3 trillion short of federal spending. That was more than three times the deficits for the eight years before Reagan — combined.
In 1980, while running for the Republican presidential nomination against Reagan, George H.W. Bush called his competitor’s claim that the country could cut taxes but not add to the national debt “voodoo economics.”
In 1991, Bush, by then president, went along with a Democratic plan to raise the top tax rate for the richest Americans from 28% to 31% to stem the red ink. Though top rates remained far below what they were when Reagan took office, any tax increase was anathema to large swaths of the Republican party. Bush paid the price when he lost the 1992 election to Bill Clinton.
A tax tug-of-war
After that, every Democratic president tried to increase taxes on the wealthy and every Republican president did the reverse.
In 1993, with his party controlling the House and Senate, Clinton proposed raising taxes to deal with deficits and offset Reagan-era tax cuts, settling on a package that raised the top rate from 31% to 39.6%.
“After 12 years of trickle-down economics where taxes were lowered on the wealthiest Americans … we now have real fairness in the Tax Code,” Clinton said as he signed the bill in August 1993.
Republican lawmakers and conservative pundits condemned the increase and warned that it would hurt the economy. “It will kill jobs, kill businesses and yes, kill even the higher tax revenues that these suicidal tax increasers hope to gain,” said Rep. Christopher Cox, a California Republican.
Rather than tanking, the economy took off. The seven years that followed represented what was then the longest sustained period of economic growth in the nation’s history. Tax revenues soared, prompting three straight years of budget surpluses under Clinton — the only time that’s happened in the past half century.
The Clinton-era top rate and surpluses didn’t last long. The federal government began running deficits again after President George W. Bush put through two tax cuts in 2001 and 2003.
While those tax bills contained modest cuts for most Americans, the benefits once again flowed largely to the rich: The top 1% of households received an average tax break of $570,000 for the eight-year period that followed the second bill, according to the Center on Budget and Policy Priorities.
It wasn’t just a result of lowering the top rate to 35%.
For decades, dividends paid to shareholders — predominantly wealthier people — were taxed like salaries and wages. But the 2003 law created a new category called “qualified dividends.” What constituted such a dividend was complicated, largely how long the stock was held, but its main benefit was that it would be taxed at 15% rather than 35% for upper-income people.
An auto worker in Detroit who received $5,000 in qualified dividends might have saved $500 under the new law. An auto executive who received $100,000 in such dividends would have saved $20,000.
This tax break, narrowed since then but only modestly, has cost the U.S. Treasury an estimated $350 billion since 2004. Upper-income taxpayers have benefited the most. In 2019 alone, it was worth $16.2 billion to taxpayers earning $1 million or more.
To put that $16.2 billion in perspective: It’s the equivalent of the federal income taxes paid by everyone earning $50,000 or less in California, Idaho, Iowa, Kansas, Minnesota, Nebraska, New Hampshire, Oklahoma, Pennsylvania, South Dakota, West Virginia and Wisconsin — combined.
President Barack Obama later signed legislation that made the tax break permanent, but he also steered tax increases through Congress, pushing the top rate back to where it had been under Clinton as well as imposing a surtax on investment income and hiking Medicare taxes for high earners to help pay for the Affordable Care Act.
All this led to what would be the signature legislative triumph of the Trump presidency, the Tax Cuts and Jobs Act of 2017. The sheer magnitude of the tax cuts it gave to the wealthy and corporations made the law the most significant since the Reagan era.
The arguments for it sounded very familiar.
“I not only don’t think it will increase the deficit, I think it will be beyond revenue neutral,” Senate Majority Leader Mitch McConnell declared after the bill’s passage. “In other words, I think it will produce more than enough to fill that gap.”
Instead, with its generous tax cuts for individuals and companies, it gushed red ink. The Congressional Budget Office estimated in 2018 that it would add $1.9 trillion to the deficit over the next 10 years.
In 2019 alone, the tax cuts cost the U.S. Treasury $259 billion. Virtually half that money flowed to those earning $200,000 or more, according to data from the Joint Committee on Taxation.
Workers earning between $50,000 and $75,000 that year got a tax cut of $840 on average. Those earning $1 million or more? Over $64,000.
As Congress cut the taxes of wealthy Americans after 1980, it also slashed taxes on corporations. Their rate plummeted from 35% to the present 21% — the lowest in 80 years.
With the help of corporate lobbyists, companies have found ways to cut their share of taxes even more by exploiting rules deep in the dense thicket of the Internal Revenue Code.
Many corporate tax provisions are so complex as to be indecipherable to the average person, and even to most lawmakers. A change in one percentage point here, an addition of a word there, the insertion of a date — any one of those can be worth millions of dollars to a corporation by giving it permission to do something previously prohibited.
The section on taxing the foreign income of U.S. companies is full of gifts negotiated by lobbyists. Here, thanks to Congress, multinational corporations enjoy a special status: They can offset their U.S. income with credits and other write-offs generated by their foreign operations. One economist estimated that the U.S. Treasury in one year alone — 2008 — lost upwards of $90 billion in revenue as a result.
The top corporate tax rate was once 35% on income earned anywhere in the world. But U.S. corporations such as Procter & Gamble, Pfizer and Hewlett-Packard had long avoided paying that rate on overseas income by stashing profits in offshore tax havens.
As billions and billions of corporate profits piled up offshore and began to approach $1 trillion, the companies fretted. A group that included Microsoft, Intel, Apple and Coca-Cola formed a lobby called the Homeland Investment Coalition to pressure Congress to change the law so they could bring that money back to the U.S. — at a lower tax rate than domestic corporations pay.
For example, while a local construction company in Des Moines might pay 35% on profits from building a high school in Iowa, the coalition proposed in 2003 that multinationals with foreign earnings would pay only 5.25% in U.S. taxes on profits earned from selling products or services outside the country.
Lawmakers were happy to help.
“We want job creation,” Sen. Gordon Smith, a Republican from Oregon, said when the American Jobs Creation Act of 2004 was being considered with a provision he helped insert to make the tax holiday happen. “We want this to get to the shop floor, not to the corporate boardroom. … We want it to go to those things that will improve the productive capacity of American industry and the rehiring of American workers. We don’t want it to be part of some financial flimflam.”
But flimflam it was. After the bargain-basement tax break became law, companies did bring money back to the U.S. Nearly half the repatriated $312 billion came from just 15 companies, including Hewlett-Packard, Pfizer and Merck. The U.S. Treasury later estimated that the tax break benefited only 4% of American corporations.
How many jobs were created by the American Jobs Creation Act of 2004?
That’s according to a 2011 report by a subcommittee of the U.S. Senate Homeland Security committee. In fact, it found the 15 largest repatriating corporations cut jobs and reduced their overall U.S. workforce by 20,931 people.
The top companies increased stock buybacks, rewarding shareholders and boosting their executives’ pay — despite provisions of the 2004 law prohibiting use of the repatriated cash for those purposes.
It’s another way that tax changes are worsening both income inequality and the racial wealth gap, because stock buybacks disproportionately benefit high-income white Americans.
The 2004 repatriation “not only failed to achieve its goal of increasing jobs and domestic investment in research and development,” concluded the subcommittee’s report, “it did little more than enrich corporate shareholders and executives while providing an estimated $3.3 billion tax windfall for some of the largest multinational corporations.”
Congress responded by doing it all over again in 2017, giving the same group of companies a variation on the tax break it had awarded them in 2004.
The Tax Cuts and Jobs Act of 2017 lowered the tax rate on most repatriated funds to 15% — not as bargain basement as in 2004, but still a dramatic cut — and gave multinational corporations a much longer holiday to bring the money home: eight years.
Promising that the tax break would “turn America into a job magnet,” President Donald Trump claimed that no less than $4 trillion would come back to the States. “This is money that would never, ever be seen again by the workers and the people of our country,” he said.
The money is coming back — but not to American workers or communities thirsty for corporate investment. Instead, just as in 2004, it is flowing to shareholders and executives. A report by the Federal Reserve found in 2019 that share buybacks for the 15 largest corporations holding offshore cash “rose sharply” after the law passed.
Money helps explain why this sort of thing keeps happening.
Every year corporations spend more than 85% of the total reported expenses associated with lobbying Congress. By contrast, labor unions, which represent interests of working people, account for less than 2%.
And though corporate donors lean Republican as a rule, they give generously to both parties. Over the past six election cycles, business-related donors contributed roughly $7 billion to Democrats and Republicans apiece, according to OpenSecrets, a nonpartisan body that tracks contributions.
Ellen Miller, who long oversaw Washington-based nonprofits that tracked the influence of money in politics, thinks that’s why Republican zeal to cut taxes was long met by less-than-energetic opposition.
“The campaign finance system we have that is inundated by corporate donors has kept Democrats asleep on this issue,” she said in an interview.
The so-called carried interest loophole is a perfect example of how companies use the influence they’ve bought.
Democrats and some Republicans have railed for years against the provision, which lets private-equity and hedge fund executives pay taxes on their pay at nearly half the going rate. Even Trump called for its end. The Inflation Reduction Act negotiated this year by Sens. Chuck Schumer and Joe Manchin would have narrowed the loophole, but even that was too much for the private-equity industry.
Company lobbyists turned to Sen. Kyrsten Sinema of Arizona, a Democrat to whom investment firms have contributed $2.7 million in the past five years.
She killed the provision. The carried interest loophole lives on.
The ‘angel of death’ loophole
Washington’s restructuring of another tax — one that affects only a handful of Americans — may best show how elected officials have shaped the tax system for the few.
In place since 1916, the estate tax has been defended by Democrats and some Republicans for many years to prevent what President Franklin D. Roosevelt once described as the “transmission from generation to generation of vast fortunes by will, inheritance, or gift.” Andrew Carnegie, one of the richest Americans and an income tax foe, had this to say about the estate tax: “Of all forms of taxation, this seems the wisest.”
But laws enacted by Republican-controlled Congresses slashed the number of taxpayers paying it from 27,568 in 1982 to 2,584 in 2021.
Collections, adjusted for inflation, were virtually unchanged over that period — even though household wealth among the rich exploded during that time.
That dramatic reduction in estate tax filings is the result of highly successful campaigns over the years by Republicans labeling it the “death tax” and advancing specious arguments about alleged injustices. One of the most popular was the claim that it forces the sale of family farms.
“They have wonderful farms, but they can’t pay the tax, so they have to sell,” Trump said in 2017.
But according to the Urban-Brookings Tax Policy Center, several analyses have not turned up “a single farm that went out of business due to estate tax liability.”
Because of favorable laws and clever tax planning, the number of estate tax returns continues to plummet. “Only morons pay the estate tax,” Trump White House advisor Gary Cohn is said to have told congressional Democrats in 2017 when they were calling for a rate increase.
Even before cuts in the estate tax, the wealthy long ago figured out how to pass along the family fortune tax free: It’s called the “angel of death” loophole, the vehicle by which great wealth is passed from one generation to the next and allowed to compound tax free into even greater value. It is the foundation on which the wealth of some of America’s richest families is built.
It works like this.
Say you bought 1,000 shares of Widget Company stock at $50 a share in 1980. By 2022, the stock is worth 10 times as much. If you sell those shares, you’ll owe capital-gains taxes of $100,000. But if you die and leave those shares to your favorite niece, no tax is owed and your niece has escaped a $100,000 tax bill.
Estimates put the amount of lost tax revenue from this loophole as high as $54 billion a year.
Closing it is on Biden’s agenda, as it was on Obama’s, as it has been on tax reform agendas for decades. But still it exists, having avoided any serious challenge in recent years.
Contrast that plum preserved by Congress for the rich with what Congress took away from the middle class in the so-called SECURE Act in 2019 (Setting Every Community Up for Retirement Enhancement).
Prior to the law, someone who inherited an IRA could withdraw payments from that retirement account over their entire life, thus stretching out taxes owed over many years, possibly decades. But SECURE mandated that withdrawals from an inherited IRA be taken within 10 years. Now a much larger portion of inherited IRAs will go to taxes because many beneficiaries will have to withdraw the money while in a higher tax bracket, before their own retirement.
That means a middle-class worker who inherits a $1 million IRA might pay $240,000 to $320,000 in taxes. A scion of a wealthy family who inherits $100 million in stock, meanwhile, pays no capital-gains taxes at the time and can cash it out whenever desired.
The bottom line
Over the past four decades, the federal tax system has been transformed into something akin to a private-equity fund for wealthy taxpayers, giving them remarkable returns from multiple sources. As Congress showered them with benefits, most Americans struggled to keep up with the cost of living.
Median household income in 1981 was the equivalent of $62,000 in today’s dollars. Since then, the earnings of the majority of American families have been mostly stagnant, just barely keeping up with inflation. Think of it as standing still financially for 40 years.
Social Security and Medicare taxes add to the brutal squeeze. They take 7.6% of wages from workers who earn $60,000. It’s only a 2% bite for someone earning $1 million because Social Security taxes are capped for high earners.
The flow of money to those at the top is at the heart of the growing concentration of wealth. The more money you make, the more opportunities to save and allow your excess income to compound.
No group of working Americans has paid a steeper price for income inequality in the tax-cutting past four decades than African Americans. Their median household income of $45,870 is nearly 40% lower than that of white households. Over the decades, “next to no progress has been made in closing the black-white income gap,” concluded a report for the Federal Reserve Bank of Minneapolis in 2018. “The typical black household remains poorer than 80 percent of white households.”
Because Black families have fewer opportunities to set aside money and accumulate assets, the wealth gap between white and Black families is even worse. White families on average have six times more wealth than Black families: $983,400 for whites; $142,500 for Blacks, according to Federal Reserve data. Half of African American families have assets of less than $25,000.
And those numbers were compiled before COVID-19, a bigger financial hit to African Americans than any other racial or ethnic group, according to the Census Bureau.
For most of the period when the country had a more progressive tax system, racial discrimination was legal. By rule and practice, the U.S. government largely blocked Black families from accessing federal programs that helped white families build generational wealth.
In the past four decades, meanwhile, wealth-building opportunities for people with modest resources have been in short supply. Sixty percent of the country — the people on the less-income side of the scale — have a lower share of total assets in the U.S. now than in the late 1980s, according to the Federal Reserve.
It would take big change to turn that around. The tax provisions in the Inflation Reduction Act are only a modest step in that direction.
Biden’s original tax proposals were much more ambitious than what wound up in that law. He called for raising top tax rates on individuals back to the Clinton-era 39.6% and on corporations from 21% to 28%, taxing capital gains like wages, eliminating the “angel of death” loophole that allows the wealthy to pass their stock holdings to heirs tax-free, and many other provisions to shift more of the tax load to those at the top.
Yet some believe that these proposals show a shift in thinking about taxes that could pave the way for more in the future.
“Biden’s investment and tax plans were more impressive than in any other previous election campaign, and he followed through with those proposals in his budget,” said Clemente, the Americans for Tax Fairness executive director.
To Chuck Collins, a senior scholar at the Institute for Policy Studies who has been tracking income inequality for years, it is more urgent than ever that the U.S. do something about the growing chasm between those at the top and everyone else — something besides making it worse.
“Our current policies are propelling us toward a society that even the rich don’t want,” he said, “with the ultra-wealthy living in walled, gated communities driving bulletproof Mercedes, a precarious middle class with a larger percentage of people with no financial reserves.
“You don’t want your children growing up in an apartheid society. It creates volatility and social and political instability. Which is what we are wading into now.”
Journalist James B. Steele has twice won the Pulitzer Prize for coverage of federal taxes and is the co-author most recently of America: What Went Wrong? The Crisis Deepens.
Clarification, Dec. 12, 2022: We added a note to a graphic showing business income taxes as a share of the total to clarify how the IRS defines those taxes.
Help support this work
Public Integrity doesn’t have paywalls and doesn’t accept advertising so that our investigative reporting can have the widest possible impact on addressing inequality in the U.S. Our work is possible thanks to support from people like you.