Republicans say we have too many now. But we used to have way more.
It’s been a common talking point for Republicans in presidential elections. Along with Trump, Jeb Bush, Chris Christie. Marco Rubio, Ted Cruz, Ben Carson, and Rand Paul all expressed a desire to reduce the number of brackets. And they said it was because it would simplify the tax code.
But tax brackets are among the easiest parts of the tax code, thanks to modern software and, well, math.
As the graphic above shows, the US has historically taxed the very wealthy more than the somewhat wealthy — and way more than the middle class. This is something Rep. Alexandria Ocasio-Cortez pointed out when she said she supported a 70 percent top tax rate for people at the very top.
In the 1960s, the tax brackets on the high end started to disappear, and during Ronald Reagan’s presidency we went down to just two brackets. That meant that many middle-class citizens were in the same tax bracket as millionaires.
Since the beginning of Reagan’s term, wealth inequality has been on the rise — with the gap between the top 0.1 percent and everyone else, including many affluent families, growing.
More tax brackets aren’t necessarily a good thing, but bracket reduction does violate the basic concept of progressive taxation. Cutting back to two adds a bit of simplicity, but also means there are huge ranges of incomes that are taxed the same.