Partly due to intensified competition between countries, national governments have focused more and more on the most mobile taxpayers (highly skilled and globalized workers, owners of capital) at the expense of groups perceived as captive (the working and middle classes). This pertains to a whole set of social policies and public services: investing in high-speed rail rather than commuter trains, elite educational institutions rather than ordinary public schools and universities, and so on. And of course it also pertains to how it’s all financed. Since the 1980s, the progressivity of tax systems has been sharply reduced: rates that apply to the highest incomes were massively lowered, while indirect taxes hitting those of the most modest means were gradually increased.
Partly due to intensified competition between countries, national governments have focused more and more on the most mobile taxpayers (highly skilled and globalized workers, owners of capital) at the expense of groups perceived as captive (the working and middle classes). This pertains to a whole set of social policies and public services: investing in high-speed rail rather than commuter trains, elite educational institutions rather than ordinary public schools and universities, and so on. And of course it also pertains to how it’s all financed. Since the 1980s, the progressivity of tax systems has been sharply reduced: rates that apply to the highest incomes were massively lowered, while indirect taxes hitting those of the most modest means were gradually increased.