Revenues foregone due to cuts to top income tax brackets, since 1982: $8.4 Trillion
It's been noted that the top few percent started to distance themselves from the rest of us starting around 1980-82. In 1982 the tax rates started getting reduced - in particular for the highest tax brackets. The top marginal rates went from 70% in 1981 to 35% in 2003 (28% in 1988 to 31% in 1991 to 39.6% in 1993) (see wikiPedia). I thought I would see how much revenue we would have had if he top tax bracket income tax rates been held at the 1980 levels over the last 30 years. The number for the lost revenues I got came to $8.4 trillion.
I used Emanuel Saez (Univ of Calif. Berkeley) and Thomas Piketty's (Paris School of Economics) spreadsheet which provides the income distributions over the period from 1913 to 2010. I applied income tax rates for the ensuing years and compared the taxes paid (in theory) to the taxes that would have been paid if the 1980 rates applied for the entire period (1980-2010).
Here is the link to the spreadsheet for those interested: Tax Revenues foregone (1980-2010)
(note this is a big spreadsheet (mostly Saez and Piketty's work) so it may take a while to download to your computer)
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