For Two Economists, the Buffett Rule Is Just a Start

http://www.nytimes.com/2012/04/17/business/for-economists-saez-and-piketty-the-buffett-rule-is-just-a-start.html?pagewanted=1&_r=1&nl=todaysheadlines&emc=edit_th_20120417

This article is about the research these two economists have done. They have been looking at incomes over time (all the way back to 1913), and have found that the US has large income inequalities that are similar to the inequalities we had before the Great Depression. They suggest that the tax plan now called the Buffett Rule is not enough of a tax on the wealthy. This is very controversial in Washington, because there is an argument that if they tax the wealthy too much then it stifle economic growth. However, these two French economists disagree saying that other countries (including the US) has had higher tax rates than the US and this has not stifled economic growth. This large economic inequality has been growing. After WWII incomes were more equal, but over time they began to get more and more unequal. In fact "from 2000 to 2007, incomes for the bottom 90 percent of earners rose only about 4 percent, once adjusted for inflation. For the top 0.1 percent, incomes climbed about 94 percent." This low tax rate for the very wealthy is a recent development it started during Reagan and if we just returned back to the pre-Reagan tax rate it would be even higher than what Buffett is suggesting. The pre-Reagan tax rate was 50%.