New York Times op-ed: Yes, Taxing the Rich Is Possible, by David Leonhardt:
For a long time, there was a predictable response to any proposal for increasing taxes on the rich: It will wreck the economy. You don’t hear this response quite so often anymore, however, because it’s become so obviously false. If anything, the economy in recent decades has grown more quickly when Washington taxes the rich more, not less.
Instead, you often now hear a new argument: There’s no point in trying to tax rich people, because they’ll just figure out a way to avoid paying taxes.
The Washington Post ran a big news article recently making this case (and parts of the argument have appeared elsewhere too, including in The Times). The Post article claimed that Elizabeth Warren’s plan to introduce an annual wealth tax relies on a set of “assumptions that defy a long history of U.S. policymaking”: namely, “that the country’s wealthiest taxpayers won’t find ways to evade the targeted tax hike she proposes.”
But this claim is wrong, too. The long history of American policymaking actually shows that raising taxes on the wealthiest taxpayers is entirely possible. ...
Over the last few decades, the total federal tax rate paid by the very rich has tended to hover between 30 percent and 40 percent. It’s been closer to 30 percent after a Republican president has cut taxes and closer to 40 percent after a Democratic president has modestly raised them.
The chart above shows the longer version of this history: the average federal tax rate — spanning income taxes, estate taxes and more — for the top 0.01 percent of earners over the past century. (The data comes from Gabriel Zucman, an economist recently profiled in a cover story for Bloomberg Businessweek.)