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Phil Magness joins us to discuss the history of taxation in America, which sheds light on how we got to the convoluted system we have today.

Throughout the history of America, we have used a variety of methods to tax the income of the public. Prior to the World War II only a fraction of the population actually made enough money to reach a taxable threshold. However, during and after the war, that threshold was lowered so much that about 90% of the population qualified for taxes to be automatically deducted from their paycheck. With that being said, there was also more deduction opportunities than their are today to avoid a large tax bill.

What assumptions do we make about income inequality? Is economic inequality inherently bad? How high is income inequality in the U.S.? What is a marginal tax rate? What is tax planning? What is modern monetary theory and what is it missing?

Further Reading:

Anti‐​Piketty: Capital for the 21st Century, edited by Jean‐​Philippe Delsol, Nicolas Lecaussin, & Emmanuel Martin

Capital in the Twenty‐​First Century, written by Thomas Piketty