A new book puts forward this controversial thesis—but the evidence doesn’t quite stack upby Torsten Bell / April 14, 2016 / Leave a comment
Taxing the Rich: A History of Fiscal Fairness in the United States and Europe, Kenneth Scheve and David Stasavage, Princeton University Press, £22.95
Thanks to Panama and its papers, the rich and the tax they do (or don’t) pay is back at the top of the news agenda. Even before the details of thousands of off-shore accounts, companies and investments emerged, the issue of what tax the rich should pay had recently returned to the centre of political debate for the first time since the 1980s.
Dealing with offshore tax havens is as much a matter for international cooperation as it is for domestic policy. But debate about them clearly influences how people view tax rates domestically—as the seamless transition from discussion of avoidance to discussion of inheritance tax proved this week.
In the UK we’ve seen a row about whether the top rate of tax should be 50 or 45 per cent generate more heat than any debate around much bigger tax rises or indeed cuts. While in the US, Bernie Sanders wants to see a return to top tax rates nearing 55 per cent at the same time as Ted Cruz (the “moderate” Republican extremist) argues for a flat rate of income tax set at just 10 per cent.