Arthur Louis's Blog

Arthur Louis

Arthur Louis
February 28
I was a writer and editor for more than forty years with four newspaper and magazine publishers. I am the author of two non-fiction books: "The Tycoons" and "Journalism and Other Atrocities," and one novel, "The Little Champ," all available on


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DECEMBER 7, 2011 4:58PM

The Case for a Regressive Income Tax

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When President Obama gets up on the stage and berates “some folks” -- his favorite pejorative term -- for not paying “their fair share” in taxes, I like to pretend that he means the people at the bottom of the income ladder. You’ve heard the statistics a million times: 47 percent of Americans pay no federal income taxes at all; 1 percent of Americans pay 40 percent of the tax bill; the top 10 percent pay 70 percent of the tax bill. And so on.

I don't know how the president defines “fair share,” but those statistics seem to suggest that the top earners do indeed pay their fair share, and then some. The same statistics suggest that people at the bottom of the ladder, the legion of citizens who pay nothing, are not paying their fair share.

But when Obama tells you his prescription for a fair tax system, it invariably involves raising the taxes of the top earners, what he chooses to call, in his best class-warfare rhetoric, “millionaires and billionaires.”

I would like to propose a different remedy. I say that we take the current tax system -- progressive taxation, with the biggest earners paying a greater share of their income than the lowest earners -- and turn it upside down. Let’s call it regressive taxation. If you earn low wages, you would pay taxes at the highest marginal rate. As your income increases, your marginal tax rate decreases, and at the very highest income levels there might be no marginal rate at all. Above a certain amount of income every extra dollar you earn  would be tax-free.

This would provide myriad incentives for people to work harder and increase their efficiency, pursue promotions, climb the income ladder. It could give the top-income people who provide all the jobs in the private sector the incentive to hire still more people. It could contribute to the rise of a new generation of entrepreneurs, real hustlers who would find it worthwhile to risk their savings on big-bucks projects. Really, I could see the United States attaining full employment under such a tax system. There could be such a colossal labor shortage at home that employers who now farm out jobs to India and China might be forced to import workers from those countries.

I don’t have enough information to say exactly what the tax brackets should look like under this new system. Any numbers probably would have to be tweaked to maintain revenue neutrality -- meaning that the government would continue to take in at least the present amount of tax revenue.  And perhaps tweaked again later, as economic conditions change from year to year. But any Treasury Department bureaucrat who is good with a computer and spreadsheet should be able to make the proper adjustments.

With the caveat that the following doesn’t necessarily represent a precise proposal ,  I will show you approximately how the tax brackets for  unmarried individuals might look if they were inverted:

Taxable income               Tax
$0 to $8,500                    35 percent of income
8,500 to 34,500             2,000 plus 33 percent of the amount over $8,500
34,500 to 83,600           6,900 plus 28 percent of the amount  over 34,500
83,600 to 174,400       12,000 plus 25 percent of the amount over 83,600
174,400 to 379,150  17,440 plus 15 percent of the amount over 174,400
379,150 and up               10 percent of income

I confess a partiality for a zero percent tax bracket as well, applying to the marginal income of anyone earning above a certain cutoff. Perhaps $1 million would be the appropriate figure, but I will leave the calculation to the bureaucrats.

I also would impose a special tax on members of Occupy Wall Street who contribute nothing to the economy because they earn no money. Perhaps an annual payment of 40 percent of their assets. Think how many syringes, drugs, bong pipes and other valuable assets would come flowing into the government coffers!

I don’t know whether my proposal would attract favor in Congress. Perhaps in the House of Representatives, perhaps not in the Senate. But the composition of those august bodies is going to change in a year or so, so I will continue to hope.

I suspect that there may be some few people who disagree with my proposal, who would prefer that the achievers and doers in the economy pay more instead of less. I guess it’s just a matter of taste. I, for one, would like to avoid slipping into the Marxist morass that Obama has in store for us.

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I don't think you're going to get an EP here for this one, if I doubt that surprises you. It has sort of a Swiftian component too me, in the last part, if not completely either, although, it is fair to point out that "who pays" isn't as clear as it is sometimes made out to be on the Left either.
It seems to me as a practical matter, that Simpson-Bowles is the best approach, which got lost in all this, because it preserves a form and way of doing things that people are familiar with, both politically and economically, as opposed to what one could come up with on the basis of the theoretical efficiencies of a very simple tax code, say a flat tax with a very high deductible, which is progressive, if possibly not as progressive as the current system. I can't really get too behind the idea of making taxes a club for the poor, since they get clubbed a lot already, if, some of them need clubs too, if not all of them by any stretch of the imagination either. Some people are also unlucky in one way or another, and there is already out migration of Americans that still have a chance to do something overseas, which might endanger the most important job creator of all: the military. If people who actually do the work, as opposed to tell other people what to do, a necessary function, and one vital to efficiency, but not the main story in the end, start to leave the country for China, will that provide well for America's future?
THANK YOU for being keen enough to see the parallel with Swift. I'm not surprised that it was lost on Paul, who has only just learned to read. The parallel was intended, and I believe there is at least a kernel of truth in there, as with Swift's "Modest Proposal."

Your own ideas seem interesting and thoughtful, but I was not in the mood to write a "on the one hand this and on the other hand that" type of piece. I seldom am.
So the closest you can come to making a case for a regressive income tax is that it would incentivise the poor? Or else this is your best example of Swiftian writing? I would like to find you amusing, but I can't laugh at anything so pathetic.
Ben, Paul, Anthony,
On that sad day when St. Peter asks you your profession, do you really want to say hitman for the Democratic National Committee? Gott in Himmel, what are you going to do if Obama loses? I shudder to imagine. (article by Larry Elder)

for more in support of the stats given by the author in this blog.

On the statistics he is, in fact, correct. And Paul, I doubt that the vast majority of those 47 percent are retired or on a fixed income.
That doesn't meet my common sense meter. I'm not trying to be nasty here, but nearly 47 percent of Americans are not retired or on a fixed income per what most of us observe. (If I'm wrong, I'd be surprised.)

BTW, the "rich" who pay more taxes are paying, at least those of them who work, that payroll tax too.

Bye now.

Some country has a system of taxation like this. It's Pakistan.
hi all I have a post on "rising tide" taxation & another one on regulation + ayn rand.
try it out for a different POV>
art, I sympathize with you being in the self-admitted 1%, and coy about your political affiliation, but probably typically voting republican. [I think you mentioned in one post you might have a net worth of more than 1M, or made more than that in your life, or whatever. now the story of that I would find very interesting, because it seems that wealthy people are underrepresented in blogging, I read a lot and I never hear anyone talking about their wealth, in fact its usually quite the opposite]
it must be hard esp on a site like this.
but geez dude, I suspect even your republican cohorts in crime would read this and not find it even a tiny bit funny or even that intellectual.
if you want to relate to swift, I think you have misunderstood the nature of his writing & satire in general. he was satirizing the extreme lack of empathy of a society. in other words, he was clearly satirizing the position that you are veiling. Ive read some of your other satire re obama, and I must admit, I found it on target. but this is just way off the mark for anyone. liberal *or* conservative. its just senseless. moreover swift was satirizing what he perceived as a mainstream POV. but the 1% are certainly in the minority. so dude, I think its back to the drawing board for you.
Thanks for the hack article, Barb. Perhaps if you read with both eyes instead of the Right one, you'd see it does nothing to counter what I said, which wasn't that most are elderly retired. Most are elderly retired AND working poor, and most pay payroll taxes.

If you eliminated the tax deductions that allow those who make less to avoid income taxes, the added tax burden would fall more heavily on those who do pay income taxes. In other words, and to clarify because I detect the need to, those tax breaks benefit those who pay income taxes more than those who don't.

It's those payroll taxes that have subsidized the debt-funded top end marginal rate cuts, so credit "those people," properly, with carrying some of the tax burden for the upper incomes. Credit them, at this point, with funding 2.5 trillion in top-end tax cuts over the last few decades. The "rich" pay far less a % of income to payroll taxes, and very few of the truly rich actually derive their income from working.

After 30 years of "conservative" wage stagnation, you might also consider that if we had never had the "conservative revolution," Americans would have higher incomes and far, far less federal debt. The number one cause of federal debt is conservative policies. In other words, and for the same reason as before, I'll clarify by saying that if you want those 47% to pay more tax, tell conservatives to quit funding top end cuts with debt and to quit making more poor people.

You and Arthur should start a right-wing genius club. It'll only take 138 more members to get there.
as I read this I picture someone with more than one job, making minimum wage at each, doing very menial stuff like say, cleaning toilets, and bearing the brunt of this tax. enough to make you proud as an american, eh arthur? I guess this is what conservatives call tough love or pulling oneself up by ones bootstraps or whatever.
I think you might have taken a page out of the book of master flimflamer frank luntz
way to go dude!!
way to take one for the team!!
go team!!
I like you, so I am going to confide to you that I wrote this article to stir up the animals. And look how many animals are stirred! There are so many that some of them are even mutants.
Okay, reading the comments I gather it's supposed to be. It wasn't clear to me since the only other thing I've read by you was the Drew Silla post. But maybe that was satire too?

Much as I enjoy a dust-up, this one doesn't feel good - too much of a disconnect between the parties. Y'all don't grok Arthur's sense of humor (or whatever), and he certainly doesn't *get* the Drew thing.
Paul, I was not trying to counter what you said, but to point out that Arthur is, in fact, right on the stats he, ah, states.

I was countering you only by saying that upper earners also, I suppose, pay payroll taxes.
Paul, yes you did include working poor. Okay. Fine. He is still right about the 47 percent not paying income tax and, yes, the "rich" also, if employed, pay a payroll tax.