Some readers have asked whether the picture of very low taxes on the very rich changes once you take taxes on corporate profits into account, and impute them to stockholders. The answer is that yes, it does, somewhat — but there are a number of implications of such an imputation, and if I were a conservative, I really wouldn’t want to go there.

On the question of how profits taxation plays into tax burdens, the CBO has already done those calculations. In particular, it did a special version of its usual tax shares analysis that looked inside the top 0.01 percent, taking the data up through 2005 (pdf). According to this analysis, in 2005 the top .01 percent paid only 17 percent of income in income taxes — but they faced an overall federal tax rate of 31.5 percent, with almost all the difference being imputed corporate taxes.

But is this really where the right wants to go? I thought corporations were people — by which Romney meant not that they eat and sleep, but that they employ people, and by being nice to corporations we’re being nice to workers. If you say instead that corporate profits benefit only the stockholders — which is what you’re implicitly saying if you impute all profits taxes to the stockholders — so much for the warm and fuzzy feelings.

More than that, however, if we do the imputation, the historical story becomes one of a simply huge reduction in tax progressivity over time. Piketty and Saez (pdf) tell the tale:

A gigantic tax cut for the top 0.01 percent, mainly coming from lower corporate taxes (with an assist from lower estate taxes). And do you really want to claim that the U.S. economy in 1960 lacked dynamism?

So if you want to factor in those corporate taxes, that’s an arguable case — but it carries with it the implication that regressive tax policy has been a major culprit in rising inequality.