But experts don’t agree on how it’s shaped, or whether the current top federal income tax rate of 37 percent is near its apex. That’s true for the federal income tax on its own, and it’s even more true when factoring in state and local taxes. A top tax rate of 54 percent takes 1 percent off long-run GDP, and 67 percent takes off 2 percent. Additionally, the U.S. has greatly expanded refundable tax credits for poorer people, such that the federal income tax burden for roughly the bottom half of earners is negligible. Other rich countries have much less progressive tax systems, not because they tax the rich less, but because they tax the middle class more.
