A half century ago, American’s wealthy financed the federal government mainly through their tax payments.
Tax rates on the wealthy were high: Under Republican President Dwight Eisenhower, they were over 90 percent.
Even after all tax deductions, the wealthy typically paid half of their incomes in taxes.
Since then — courtesy of Ronald Reagan, George W. Bush, and Donald Trump — the effective tax rate on wealthy Americans has plummeted.
Meanwhile, America’s wealthy are financing America’s exploding debt by lending the federal government money, for which the government pays them interest.
Now the government pays the wealthy interest on their loans to finance a swelling debt that’s been caused largely by lower taxes on the wealthy.
It’s the decline in tax revenue from America’s wealthy combined with growing interest payments to them. »