Ethersnap

According to our analysis of current tax rates and their elasticity, the revenue-maximizing top federal marginal income tax rate would be in or near the range of 50%-70% (taking into account that individuals face additional taxes from Medicare and state and local taxes). Thus we conclude that raising the top tax rate is very likely to result in revenue increases at least until we reach the 50% rate that held during the first Reagan administration, and possibly until the 70% rate of the 1970s.

To someone who lives in the fashionable neighborhoods of Washington, communities such as Gaithersburg, Springfield, Chantilly, and Ellicott City are seen as unexceptional middle-class and upper-middle class suburbs. But in fact the people in those zip codes have a combination of education and income higher than that enjoyed by all but 5 percent of other Americans.

In a way, the United States is becoming like Old Europe, which is very strange in historical perspective,” Mr. Piketty said. “The United States used to be very egalitarian, not just in spirit but in actuality. Inequality of wealth and income used to be much larger in France. And very high taxes on the very rich — that was invented in the United States,” he said.

It doesn’t make us weaker when we guarantee basic security for the elderly or the sick or those who are actively looking for work. What makes us weaker is when fewer and fewer people can afford to buy the goods and services our businesses sell, or when entrepreneurs don’t have the financial security to take a chance and start a new business. What drags down our entire economy is when there’s an ever-widening chasm between the ultra-rich and everybody else.

The conceit that poverty is a problem suffered by other — often less deserving — people was an essential part of suburban self-identity that was reflected in its politics. Better-heeled suburban schools, sports teams and private recreation contributed to an ethos that emphasized family residential security, individual meritocracy and private life. Its inhabitants conveniently forgot that their cherished neighborhoods were in fact dependent on the programs of the New Deal state, not to mention the federal residential security maps that privileged white Americans.