EQUITABLE TAX SYSTEM

Why America Must Restore a Truly Progressive Tax System

The American tax system has become a national disgrace—an albatross around the necks of working- and middle-class citizens while the ultra-wealthy accumulate obscene levels of wealth, paying a fraction of their fair share. We once had a progressive tax system to ensure that those who benefit the most from society’s resources contribute proportionately. That system has been gutted, perverted, and ultimately reversed into a de facto regressive system, where the poor and middle class pay the lion’s share while billionaires escape virtually unscathed.

Meanwhile, across the Atlantic, European nations have demonstrated how progressive taxation fuels a thriving, equitable society. It’s time the United States stopped acting like a third-world oligarchy and started taking lessons from the rest of the developed world.

The Roots of Progressive Taxation and Its Betrayal

The United States didn’t always have an income tax, let alone a progressive one. In its early days, revenue was generated through tariffs and excise taxes, highly regressive mechanisms that disproportionately burdened those with lower incomes. That changed with the Civil War-era Revenue Act of 1862, which introduced a modestly progressive income tax to finance the war effort. Later, the ratification of the Sixteenth Amendment in 1913 solidified the federal government’s ability to levy income taxes, paving the way for a truly progressive system.

At its peak, during the mid-20th century, the U.S. had a tax system that ensured the wealthy paid their fair share. In the 1950s, under Republican President Dwight Eisenhower, the top marginal tax rate was a staggering 91%—and guess what? The economy thrived. The United States built the interstate highway system, expanded access to education, and lifted millions into the middle class. This was not a period of economic decline but a golden era of prosperity.

Then came the betrayal. Ronald Reagan’s tax cuts in the 1980s marked the beginning of the end for severe progressive taxation. The top tax rate plummeted from 70% to 28%, shifting the burden downward. The neoliberal gospel of “trickle-down economics” was sold to the American people like snake oil, promising that tax cuts for the rich would magically benefit everyone. Instead, wages stagnated, wealth inequality skyrocketed, and the American dream began its slow death spiral.

The American System Is Now Regressive—By Design

Today, America’s tax system is regressive in all but name. While the federal income tax remains mildly progressive, it is riddled with loopholes, deductions, and credits that overwhelmingly benefit the wealthy. However, the real injustice happens at the state and local levels, where reliance on sales, property, and payroll taxes disproportionately hits lower-income earners.

Consider this: in states like Texas and Florida—both of which pride themselves on having no state income tax—the tax burden falls disproportionately on the poor and middle class. Why? These states rely heavily on sales and excise taxes, which take a much larger share of income from low earners than from the wealthy.

An Institute on Taxation and Economic Policy (ITEP) study found that the poorest 20% of households in the most regressive states pay tax rates up to seven times higher than the richest 1%. The billionaire class, meanwhile, pays next to nothing, thanks to tax shelters, capital gains loopholes, and offshore accounts.

Europe’s Tax Model: A Blueprint for Fairness

Across Europe, many nations have refused to buy into the American-style neoliberal tax scam. Instead, they maintain strong progressive tax systems that fund universal healthcare, tuition-free education, robust infrastructure, and generous social programs while maintaining economic growth and innovation.

Take Denmark, where the top income tax rate is around 55%—and yet Denmark consistently ranks among the happiest nations in the world. Why? Because tax revenue is invested back into society, ensuring free healthcare, paid parental leave, and world-class public transportation.

Look at Germany, where corporate tax rates are higher than in the U.S., yet German businesses remain globally competitive. Unlike in America, where large corporations pay little to nothing in taxes while receiving massive subsidies, German corporations contribute to the well-being of the nation as a whole.

Even France, often derided by American conservatives, has a tax system that ensures the wealthiest contribute fairly. A wealth tax on high-net-worth individuals complements their progressive tax brackets, something the U.S. refuses even to consider.

The Path Forward: A Tax System That Works for the People

It’s time to reject the propaganda of the billionaire class and demand a tax system that works for the majority of Americans. Here’s what needs to happen:

1. Restore Higher Marginal Tax Rates – The ultra-rich must pay their fair share again. A top rate of at least 70% on incomes over $10 million is not extreme; it’s what worked before, and it can work again.
2. Close Loopholes and Tax Wealth – The real money isn’t in income taxes; it’s in wealth. We need a wealth tax on billionaires and higher capital gains taxes to ensure that investment income is taxed at least as much as wages.
3. Federalize and Equalize State Taxation – States that rely on sales and excise taxes must be reined in. The federal government should incentivize progressive state tax structures, ensuring fairness across all states.
4. Crack Down on Corporate Tax Evasion—There should be no more offshore loopholes or subsidies for billion-dollar companies. A minimum corporate tax rate of 25% should be enforced.

America Must Choose: Progress or Oligarchy

A progressive tax system is not just about fairness but survival. If we continue down this path of regressive taxation, where the rich get richer while the working class struggles to afford basic necessities, we are setting the stage for a social and economic collapse.

We can either restore a tax system that prioritizes the well-being of all Americans, or we can continue subsidizing billionaires and corporate greed while the nation crumbles. The choice is ours.

William James Spriggs