All the discussion about what income tax structure will stimulate the country while not reducing the incentives of America’s wealthiest – recall that 1% of us hold 1/3 of the net worth and 10% have over 70% of the net worth.

We’re taxing the wrong things. We expend a lot of energy talking about income tax brackets, ignoring the extent to which US income is concentrated among a relative few of us.

We’d be wiser if we started paying attention to how income has become so concentrated: through granting of privileges such as the privilege of pocketing most of the value of natural resources; the privilege of collecting what is mostly land rent not building rent, both month by month or in the form of “capital” gains upon sale of urban land; the privilege of using the electromagnetic spectrum without paying one’s community for the privatization of this scarce resource; geosynchronous orbits; landing rights at Laguardia and other congested and constrained airports; water rights; rights to pollute.

If you’re not familiar with the statistics on how concentrated the benefits of such privileges are, read the Survey of Consumer Finances data on Equity (publicly held stocks) and “BUS” (the value of privately held companies) at LVTFAN. A few percent of us own awesome percentages of these privileged assets and reap what the rest of society sows through its labor and presence.

And our economics education neglected to mention this detail. (Should we be surprised?)

Life on a tilted playing field – and we’re so used to it that we don’t even realize the tilt.

The wealthy can be stimulated to do the things which create jobs and drive wages upward for ordinary workers – but it isn’t through fiddling with income taxes. We may need to fiddle with them in order to reduce the effects of our terrific income concentration and our need for revenue for legitimate common purposes, but it isn’t the answer to stimulating the economy.