"What Bernie Sanders and Elizabeth Warren are proposing is to tax the ultrariches"

Advising the two candidates for the Democratic primary on tax issues, the 32-year-old French economist has published, with Emmanuel Saez, "The Triumph of Injustice", which will appear in France in February (Seuil). He returns to the growing inequalities in the United States and the solutions to reduce them.

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Democratic candidate Elizabeth Warren, at the union summit for all, in Los Angeles, October 4. ERIC THAYER / REUTERS

Interview. Professor of Economics at the University of California, Berkeley, Best Young Economist Award 2018 (awarded by The world and the Circle of Economists), Gabriel Zucman, 32, is a former student of Thomas Piketty, his thesis supervisor. Today he advises the candidates for the American Democratic primary Bernie Sanders and Elizabeth Warren, and publishes, on October 15, The Triumph of Injustice (W. W. Norton & Company, 288 pages). Co-authored with his colleague Emmanuel Saez, director of the Berkeley Center for Equitable Growth, the book will be published in France in February, published by Seuil, under the title The Triumph of Injustice Wealth, tax evasion and democracy.

In your new book, you recall that the United States was, against all odds, a model of fiscal justice. At what time in their history?

Americans tend to think that tax progressivity is a concern of Europeans. In fact, historically, it's the opposite. The United States was both the country that has been the furthest in fiscal progressivity and the one that has gone furthest in the opposite direction. In the 1930s, they applied a quasi confiscatory rate on the highest income: 90%. During the Second World War, Roosevelt even referred to a 100% rate. He wanted a legal maximum income! Congress hesitated, and they agreed on 92%.

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Historically, there is an American tradition – and also English – that is very progressive, which has never existed in continental Europe. No European country, not even Scandinavians, has tax rates on large estates of 70% or 80%, like the United States. There was only one exception: Germany, between [1945and1948whentheUnitedStatesoccupiedit!InJapantheAmericansalsochoseataxrateonveryhighincomesof80%-whichplayedanimportantroleinthefactthattheinequalitiesremainedratherlowForthemthereconstructionofamarketeconomyandahealthydemocracywasaccompaniedbyaveryredistributivetaxonveryhighincomes

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The higher maximum rate of income tax dropped a bit in the 1970s. But when Reagan came to power in 1981, he was still 70%, one of the highest in the developed world. Six years later, the marginal rate had fallen to 28%. This is a fascinating revolution: from 90% to 28% in such a short time! When the United States advised post-Soviet Russia, they recommended a rate of about 30%, similar to theirs. Russia followed, before adopting a Flat tax (flat tax) of 13%. In short, the United States has had a great influence on global tax policy.


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