The Robin Hood state: taxes are getting more progressive

What It Covers

The Economist examines three global trends: tax systems becoming more redistributive since the 1980s despite rising pre-tax inequality, Colombia's surge of mercenary soldiers fighting in foreign conflicts due to inadequate veterans support, and Spanish language use in America likely peaking rather than growing due to generational assimilation patterns.

Key Questions Answered

• •Progressive taxation reality: Approximately 7 out of 10 countries have more progressive welfare states today than in 1990. Post-tax inequality in many nations is no higher than in the 1990s, meaning redistribution has effectively offset decades of rising pre-tax inequality — America redistributes roughly twice as much as it did in the 1960s.
• •Historical tax loopholes: High marginal tax rates in the 1950s–1970s were largely ineffective because wealthy individuals legally sheltered income through expense accounts covering food, cars, and housing. Closing these loopholes — not raising headline rates — is the primary driver of today's more progressive outcomes, meaning enforcement matters more than rate increases.
• •Mercenary supply chain: Colombia exports an estimated 10,000 soldiers to foreign conflicts partly because military rules force retirement at age 45 or after 20 years of service. With pensions around $450 monthly versus $10,000 monthly offered in Ukraine, the financial incentive is overwhelming and Colombia's inadequate veterans policy directly fuels the outflow.
• •Spanish generational decline: Around two-thirds of second-generation Latino immigrants in America speak Spanish, dropping to just over one-third by the third generation. Overall, only 57% of American-born Latinos speak Spanish, and more than one-third of Latinos support making English the official language — assimilation follows the same pattern as earlier German, Italian, and Polish immigrant waves.
• •Wealth tax behavioral limits: Early predictions that high taxes on the rich would trigger mass capital flight have largely not materialized, prompting politicians to push rates further. However, California's proposed billionaires tax and recent UK tax increases show early signs of wealthy individuals and businesses relocating, suggesting a threshold effect that policymakers should monitor carefully.