Make Taxes Progressive and Collectable

Why It Matters

Progressive tax reforms would narrow income inequality and provide a durable revenue stream for critical public investments, reshaping the fiscal landscape ahead of looming budget deficits.

Key Takeaways

• Current US tax code skews benefits toward top 1% earners
• Closing loopholes could raise $1.5 trillion over ten years
• Boosting IRS budget would increase collection efficiency by 20%
• Corporate tax hike to 28% aligns with OECD average
• Progressive reforms fund infrastructure, education, and social safety nets

Pulse Analysis

The United States has seen a steady erosion of tax progressivity over the past two decades, as top‑income earners capture an ever‑larger share of after‑tax income. Data from the Treasury and the Congressional Budget Office show that the top 1% now pay roughly 15% of total federal taxes, down from 20% in the early 2000s, while their share of national wealth has surged past 30%. This divergence fuels public concern about fairness and limits the government’s ability to finance long‑term priorities such as modernizing infrastructure and expanding broadband access.

Baker’s proposal tackles the imbalance through three interlocking levers: higher marginal rates on incomes above $500,000, a corporate tax increase to 28%—bringing the U.S. closer to the OECD average—and a crackdown on loopholes that let high‑income individuals shelter billions in offshore accounts. The paper estimates that these changes, combined with a 30% boost to the IRS’s enforcement budget, could lift federal receipts by $1.5 trillion over ten years, enough to offset a significant portion of the projected $2 trillion deficit by 2035. By modernizing audit technology and expanding staff, the IRS could improve collection efficiency by roughly 20%, reducing the tax gap that currently exceeds $400 billion annually.

If enacted, the reforms would reshape the fiscal outlook, providing a stable funding base for the Majority Agenda’s priorities—good jobs, strong infrastructure, and a reinforced social safety net. Politically, the measures face opposition from business lobbies and some congressional factions, but growing public support for tax fairness could shift the debate. Ultimately, a more progressive and collectible tax system promises to narrow inequality, restore confidence in public finance, and enable the United States to meet its long‑term investment needs without resorting to unsustainable borrowing.