Professor Sugin Discusses Tax Season in the NY Times
Professor Linda Sugin wrote an op-ed for the New York Times in light of tax season. Sugin stressed the importance of thinking about how we can readjust our federal tax system. Sugin pointed to the inequalities that arise due to our system that imposes much lighter taxes on investments than on income from work.
Because people with high incomes earn a much greater percentage of their total income from investments — and, crucially, because much of that investment income is wealth accumulation that has not been liquidated — tax law favors the rich far more than most people realize.
Sugin said this system should alarm us because of how it disparately affects individuals at the same income level. Workers pay more tax on their earned income than investors do.
At $70,000 total income, the worker pays almost $20,000 in federal taxes, roughly half in payroll tax and half in income tax. The investor with $70,000 in capital gains pays less than a fifth of that. This is not just an abstract discussion; it means that the 25-year-old trust funder is paying less in tax than his counterpart who fixes computers for a living.
Read Sugin’s op-ed in the New York Times.