Understanding Economic Growth and Tax Policy

The video explores the relationship between per capita GDP growth and after-tax income of the bottom 90% since 1947. It highlights a divergence in growth rates starting in the 1970s, potentially linked to changes in tax policy. The video examines historical tax rates and their evolution, noting a decrease in effective tax rates for higher income groups over time. By 2018, the top 400 earners pay lower effective tax rates than most other groups, attributed to income from capital gains and tax shelters.

What period did the after-tax income of the bottom 90% grow at a similar or faster rate than per capita GDP?

• 1970s to 1980s

• 1947 to the late '60s

• 2000s to 2010s

• 1990s to 2000s

What factor is suggested to influence the trend of income growth disparity?

• Inflation rates

• Globalization

• Tax policy

• Technological advancements

In 1950, what was the approximate effective tax rate for those in the 99th percentile?

• 70%

• 50%

• 30%

• 16-17%

By 1983, which group was paying a lower effective tax rate than the 99.99th percentile?

• Top 10%

• Middle 50%

• Top 400

• Bottom 10%

What is a reason for the highest income group paying lower effective tax rates?

• Lower savings

• Increased consumption

• Tax shelters and capital gains

• Higher wages