What's wrong with taxing 90% of income over let's say $5 million

[Herman Munster]

From 1952 to 1963, marginal tax rates were 91-92% of income above $400,000.

http://www.truthandpolitics.org/top-rates.php

[originalpckelly]

1. Um, because they can't invest that money and grow the economy?

Where do you think loans come from to start new businesses or expand existing ones?

[wuushew]

11. The United States economic model is not sustainable

taxation still has an important wealth redistribution purpose to serve in a no growth environment.

http://www.sef.umd.edu/files/ScientificAmerican_Daly_05.pdf

[originalpckelly]

14. Our current system is not capitalism, and therefore I agree.

A neo-fascist economy is just as bad as any other form of planned economy in the long run, and the structural deficiencies in our economy, i.e. the fact that we import so much of our material goods while lacking the ability to export services, will eventually do us in.

To be sure, the Bush tax cuts have artificially depressed the rates of taxation to pump money into the economy, in turn causing the economy to fail to self-regulate. This was almost certainly done to make Bush look better.

However, that does not mean returning to the 90% rates of taxation in the highest brackets is viable. It's far more appropriate to return to the Clinton era tax rates, which were slightly higher. I remember seeing this wonderful graph presented to a Senate committee, it had the ideal rate of taxation, and the Clinton era rates were right in the taxation sweet spot.

[davekriss]

24. Despite my replies to you down thread

I strongly agree with you here.

[davekriss]

12. If you look at the debt balloon...

...during the Reagan-Bush I years, federal debt increased about the same as the taxes not collected from the top tiers of our socio-economic pyramid. It would make sense to par back marginal rates if we -- in 1981 or in 2001 -- had a crisis in capital formation, something that does happen from time to time in capitalist economies, but that was not the case. There is no reason whatsoever to give our landed aristocracy the favor of 15% maximum tax on their principle sources of income.

A little math does wonders: I recall George W Bush on the stump selling his tax cuts, saying that the cuts would create so many jobs. I did the calculation. Each new job cost $550,000. Bush's tax cuts amounted to handing the rich guy a half-a-million with a thin string attached, the obligation to hire someone to trim the hedges around his tennis court for $50,000 a year. What a deal! No wonder there's such strong support for the Republican Party at the top of our economy!!

The federal government doesn't consume those taxes never to be seen again, they spend it. It's not a black hole. When George W Bush says he wants us to spend our own money, he means he wants the country club set, of which he is a member, to spend it. He doesn't mean you or me. I prefer that we have opportunity to democratically determine how that money is spent. I prefer that we tax those with the ability to pay more than those without that ability. I prefer a steeply progressive tax system. After all, its redistributive effects contributed to the rise of that historical anamoly, a healthy middle class.

[krispos42]

17. And what do you think they're going to do...

...with the first $5 million they earn? Spend it on Dove bars and commemorative Elvis plates?

And in case you didn't notice, what they're doing with their money is starting new businesses or expanding existing ones.... IN CHINA!

Oh, and they're buying and selling real estate and a fever pitch, driving up prices across the board.

Taxing the rich more would enable lower taxes on the middle and poor classes. Their housing prices would fall, or at least stabilize, and their greater income would enable them to invest more in the stock market and financial institutions. Which would raise investment money to put into new business or expanding new ones. Except that, with money from tens of thousands of average people instead of a select few rich ones, where those new and expanding business will go hopefully will be decided on more than just profit margin.



The real problem here, though, is this:


The Supreme Court has ruled that money equals free speech.

Therefore, the more money you have, the more free speech you have.

When the top 1% owns 40%, 50%, 60%, 70% of the country's wealth (or whatever the actual percentage is), it means they own that same percentage of the free speech.

And when 60% of the free speech is calling for tax cuts and government deregulation and fat, cost-plus contracts, well, that's what the politicians do.

And you have where we are today. Reagan's tax cuts put so much money in the top 1% that they are now the effective majority in this country. And surprise surprise, the government reflects that perfectly now, doesn't it?


While a class of wealthy people is an integral and important part of capitalism, we have to keep that class managable and not too powerful, perceived fairness be damned. If you don't want to pay 90% income tax, make less money. Turn down those bonuses. Get more deductions. Tell your company to use the money for capital expeditures and infrastructure development. Lower prices. Retire.



I'll sacrifice a little economic growth overall to stifle the top 1% and help the bottom 50%. BushCo has zero compunction about doing the opposite. And the economic growth happens regardless of which way you do it.

[sandnsea]

32. They grew it in India, China and Dubai

Not here. And they took our FICA money to do it.

[sutz12]

36. That's a red herring....

The investment occurs before that tax is applied. We don't tax gross, we tax net. High marginal tax rates actually incentivize reinvestment to avoid taxation, whereas low marginal tax rates encourage discretionary spending on luxury items. Why invest money you can spend on trips to the Cote d'Azur?

[originalpckelly]

51. Actually, that's not what I'm saying. If you tax income like that...

and I mean real income from working, it reduces the amount of money that can be controlled by the people and put into investments.

[dysfunctional press]

54. income like that is NOT "real income from working"...

the vast majority of people with those kinds of incomes are getting the bulk of it it from interest and dividends.

[gtar100]

44. Yea, there were hardly any businesses between 1952 and 1963

**NOT**

How is it that the most greedy, self-serving people, the ones willing to allow millions upon millions of people to languish in poverty, sickness, filth and war, while they hold onto more money than they could spend in generations, how is it that they will be our hope for investment to make the world a better place? I think not.

Those who work hard and intelligently in such a way that benefits society, humanity, and the earth I believe should be well rewarded for their efforts. They deserve to live well and are a blessing to us all. But there is such a thing as excess. And where that excess belongs is in the public sector so that wealth may benefit the greater good of all people. Private corporations have little incentive to invest years of loss to develop clean, alternative energy, cures for illnesses, or minimal cost access to the necessities of life - health, food, water, shelter, and (in today's age) energy. These vital necessities demand that the incentive for profit be removed in order for higher intelligence to work rather than low level greed. Only a collective, democratic government is in such a position to do these things.

Of course this only works when a government is formed by the people and for the people. Being that our government is now an extension of corporations, it won't work.

And one more thing. We have existed for ages past when wealth has been concentrated into the hands of the few. The legacy of this arrangement is exploitation, slavery, poverty, servitude, social classes, and endless wars. I'm not willing to give it another try just to see if the "winners" will play nice. A progressive tax (in which the tax rate increases with an increase in income) is one way out of this mess. And the years 1952 to 1963 are proof that it can work.

[sicksicksick_N_tired]

132. Wow!!! gtar100!!! Well stated!!!! Bravo!!!

:applause:

[tsuki]

49. Nothing. n/t

[JackRiddler]

55. Um, governments can also invest money...

In fact, government investment and demand has been the #1 source of manufacturing growth under Bush (in the war sector).

Loans come from banks declaring that they exist. A fractional reserve is supposed to be set aside and the bank can then lend a multiple of that, which is not pulled from deposits but simply called into existence.

[mrreowwr_kittty]

64. That's how people avoided the marginal tax rates

You didn't get taxed if you invested back into your business. That's why we enjoyed tremendous growth and prosperity during that era. The majority of rich people didn't pay those high tax rates.

[slampoet]

68. This is taxing Income NOT working assets. Stop clouding the issue.

[scisyhp1]

72. And the government would do with this money exactly what?

Feed it to the worms? Like using that money to help those needeing it most don't
grow the economy? Even more so, because the economic impact is much broader.
Yacht building and caviar importing sectors might indeed suffer, so what?

[ProudDad]

83. Mostly from folks buying houses and savings accounts

they sure as FUCK don't come from the rich bastards who hoard their dough in "offshore investment accounts"...

Most jobs are provided by SMALL BUSINESSES -- mom and pop, NOT the fortune 500 -- the big corporations contribute zero to none net new jobs in this country. Actually, by now, they may be a NEGATIVE "contributor" to the jobs rate.

On Edit: I would also like to reiterate that these would be taxes on PROFITS (income)...an incentive to actually invest instead of hoard.

I'd also extend that tax rate to ALL profit whether accrued in this country or abroad. If you want'a live here -- you pay your dues...

[Donald Ian Rankin]

109. Trying to explain economics to DUers is never going to work, I'm afraid.

You're right, and you can take some satisfaction in knowing that no-one who doesn't know you're right is going to be elected President, but you're never going to be able to convince the majority of DUers of that.

Economics is hard; that makes many people who don't understand it think they do. I know I *don't* understand economics, but I know enough maths and game theory to agree with you.

[movonne]

2. Not a thing...it should be done...and without delay...

[MannyGoldstein]

3. It Worked Fine Then

GDP growth was far higher than it's been since we cut taxes on the wealthiest Americans to under 20%.

http://blueworksbetter.com/PresidentsGDPGrowth

[Selatius]

23. Yeah, but the Repubs don't let facts stand in the way of a good story.

Most Repubs won't mention the massive social spending under the New Deal if they can get away with it.

[catmandu57]

4. Not a damn thing

Noone should have more money than they can spend in two lifetimes, if they fuck up and lose it tough, live like the rest of us do.

[cali]

5. I don't have a problem with high tax rates on

incomes over 5 million, but it's important for folks to realize, that there were then, and always will be, loopholes. There were people in 1962 who had more money then they can spend in two lifetimes. And I have no idea what you mean when you say if they fuck uup and lose it tough.

[catmandu57]

16. We had this argument before

Not you and I, but somewhere upstream this has been around. At that time someone was crying about maybe someone would lose all their money then where would they be? Well, they would be alive like the rest of us unwashed masses, forced to survive on their wits and labor. That's what I meant.

[papau]

6. The Brits once had a 105% effective tax on dividends over something like a million pounds - I liked

that rate! :-)

[ProudDad]

84. I'd make it 120% now -- inflation (n/t)

[RB TexLa]

7. Same thing that is wrong with taxing income above $40,000 at 92%

[davekriss]

15. The top ever marginal FIT was...

...94%, on income over $400,000 in 1945. That's in 1945 dollars. In 2007 inflation-adjusted dollars, that's $4,620,377.78.

The top rate was 92% as recently as 1953 on income over $400,000 in '53 dollars. That's $3,114,861.42 in 2007 dollars.

Hardly seems unreasonable to me.

Sources: http://www.truthandpolitics.org/top-rates.php
http://data.bls.gov/cgi-bin/cpicalc.pl

[Egalitariat]

133. And nobody paid it. As long as their lawyers are smarter than our

congresspeople, which will always be the case, no punitive tax structure will ever be effective. And that includes the ones mentioned in this thread.

[TahitiNut]

38. Golly. It sure did remove the incentive to get rich, didn't it?

I mean ... absolutely nobody got rich in those days, did they? :eyes:

:sarcasm: <-- some things need to be spelled out for beings from cloud-cuckoo-land

[scarface2004]

8. that is wrong, should be 95%.

and if they complain, take all their damn money away and make them sell newspapers on the corner, then at night they pack up and return to the shelter!!

[originalpckelly]

9. Has it ever occured to you that someone might deserve money...

if they work their ass off to get it? Even if it is over 5 million? People can invent things you know.

[davekriss]

20. Sure

But let's hope the accounting that leads to after-tax dollars take into account the many things that our democratic and societal institutions contributed to that windfall. One example: The entrepreneur would not have the opportunity to create that value if the U.S. armed forces did not secure and maintain economic liberty. We could work our way through a list and see what's left over for that mythical hard-working inventor.

The inventor can keep $5,000,000 on his last $50,000,000 in compensation, I have no problem with that.

Tell me, just what the social-economic value is that a hedge fund director personally contributes that justifies $200,000,000 in compensation. Sure, you'll say if anyone wants to pay that person that much, it is their right. So be it. But it is our right to collect as taxes what we democratically choose to collect, too. I don't think the hedge fund director occupies the moral high ground in this argument.

One thing not said so far: From 1970-1980, earned income was treated preferentially over un-earned income. Most of that period saw a top rate on earned income (salaries and bonuses) of 50% for every dollar earned above $1,000,000 (today's dollars). During the same period the top rate on unearned income (interest, dividends, capital gains) was 70%. The regressive inversion of preference is one of the legacies that followed that period. Now capital gains is preferentially treated while the working man has to pay at a higher rate. One of the successes of Movement Conservatism is to convince the working man to sweat a little more while the country club set hits another nine holes. "Now watch this swing," Bush says while inwardly giddy over the travesty! Class war, and the working class stiff is clearly losing...

[Selatius]

21. Eh, but you run up against the question of individual desires vs. society's needs.

It's not a black or white issue. According to the Laffer Curve, there is a marginal taxation "sweet spot," but that's dependent upon each individual's definition of the "right" tax rates. You think 95 percent is too high, but someone else might be fine with that because if he ever made so much money that he was in such a tax bracket, he'd already make enough in just one year to last a lifetime. Then we also must address larger societal needs, such as funding for public education and health care and infrastructure repair/maintenance or paying off the 9 trillion dollar national debt.

[MilesColtrane]

33. They don't invent things and get rich in a vacuum.

The society and the economic system in which entrepreneurs operate enable them to get rich.

For that, they are ethically responsible to take on a greater share in maintaining it's upkeep, and to see to it that others have the same opportunities.
They are also morally responsible for those who are incapable of caring for themselves.

[JackRiddler]

57. Sure...

Which is why people working their butts off for $30 k shouldn't be taxed at all.

[mrreowwr_kittty]

67. Very few wealthy people are inventors or entrepreneurs

Most wealth is acquired through inheritance and capital gains on investments. In other words, it's passive income. As Thom Hartmann likes to say, it's people sitting by the pool calling their brokers and cashing dividend checks.

[ProudDad]

85. Bullshit!!!

Nearly EVERYONE who makes that kind of money was BORN into it...

Nearly EVERYONE who makes that kind of money is a detriment to society rather than a benefit...

"Work their ass off to get it?" :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl:

I've seen those pricks at "work"...

[mainer]

111. As someone who worked my ass off to get rich...

I agree with you.

My dad was a cook. NOT a chef, but a fish cook. My mom was a social worker. Where were all the "benefits" that helped me get to where I am?

If I were taxed at anything over 50%, I'd ask myself why the hell I keep working, and I'd quit. Just like that.
(And no, I don't sponge off anyone else's labors. I have no employees whatsoever, only my devoted spouse.)

[cali]

10. This is sarcasm, right? n/t

[Kurt_and_Hunter]

13. Nothing is wrong with it.

[aikoaiko]

18. That just seems so wrong --- that proportion.

I can see why people would be unhappy with giving up that much of their earned income.

[Blue Fire]

70. The lions share of that income is unearned income.

It's passive income from dividends, interest, inheritance, etc. This income is generated on the backs of working class Americans like my wife and I. I clock in for my 12-hour shifts, run my machines and watch the products I make generate a multi-million dollar income for our CEO, and the CEOs of the companies who buy our products while threatening to take their business to China or India if we don't sell it cheap enough. As a result I and my fellow workers watch our paychecks shrink in real dollar value every fucking year while the corporate goons crow about record profits and lavish bonuses 100 times my annual income on some pin-stripped greedmonger who would have a cardiac if he had to get his hands dirty.

Tax the fuckers! I kinda like that 95% rate!

[Selatius]

19. It's anti-business, and America is all about business and materialism.

It'll fly in France or Sweden or Germany, but not here.

[davekriss]

22. Since you picture Chomsky as your avatar

Just for you:

If you assume that there's no hope, you guarantee that there will be no hope. If you assume that there is an instinct for freedom, there are opportunities to change things, there's a chance you may contribute to making a better world. That's your choice.
-- Noam Chomsky


And today's bonus quote is...:

For every dollar the boss has and didn't work for, one of us worked for a dollar and didn't get it.
-- "Big" Bill Haywood

[Selatius]

25. I should've included the sarcasm tag.

The problem is much more complicated than what any number of quotations could encapsulate. You've got people right here in this thread pushing back against the idea of returning to FDR era tax rates. That alone should illuminate how complex and difficult it would be.

[davekriss]

26. Understood

And I personally wouldn't aim at FDR WWII rates. Let's achieve universal healthcare first, peace in our time -- then we can consider eating the rich!

[ProudDad]

86. Ain't gonna get ANY of this

"universal healthcare first, peace in our time"...

until the rich are broasted and served on a freakin' platter...

[davekriss]

100. You might be right

Today there are two votes in America. A Dollar Vote that's followed by a democratic vote. Nothing gets on the agenda of the democratic vote that does not first pass the dollar vote. The problem with this arrangement is those with more dollars get more votes than those with less. The result of this anti-democratic setup is that those with money get to set the agenda for the democratic vote.

This agenda includes items that first and foremost serve the monied classes. The resulting thrust of policy and law serves reflects those interests. Our interest, we denizens of the bottom 90% of America, are seldom represented -- oh, to some degree we are, we get just enough to maintain the illusion of democracy and opportunity, just enough to render us as passive "consumers", unknowingly chained down in inescapable debt peonage. So somehow the virtuous cycle of money buying politicians who promise to transfer more money to their benefactors must be broken. One way is to take money out of the cycle, out of the wallets of the corpo-fascist-oligarchy. And a way to do that is to restore a steeply progressive tax rate on earned and unearned income.

I am now convinved: 90% on income above $4,000,000 is the way to go. It won't generate a heck of a lot for the coffers in the federal budget, but it will diminish some of the anti-democratic power that accrues from massing significant wealth.

[Trillo]

96. One of the criticisms I've seen about FDR's rates

is how they enabled a backlash in the form of long-term loophole-ridden legislation, which benefited those with high incomes, tending to make them even higher, and spawning a professional class (good for higher education) whose sole purpose was tax avoidance for wealthier clients. While I'm no expert therein, generally it seems correct based upon what I've seen in my years.

[mvd]

27. I would go beyond the Clinton rates, but I don't know about 90%

Maybe up to 50% of income when you go over a million, up to two-thirds on income over $100 million, and 75% over one billion dollars. Some people are so rich that they don't even know what to do with it.

[minavasht]

28. Remember the old communist block?

They had the same idea about "fair" income - nobody had an incentive to work hard and increase productivity.
The result - they are gone.
Like it or not, some people deserve to make more than the rest of us.

[gtar100]

45. Their problem is they didn't really practice "communism"

The "state" may have owned everything, but only a few really could partake in the fruit of that ownership. New boss same as old boss scenario. The great "sharing" of wealth by the workers never really materialized and those in charge left most people in poverty. People like Stalin and Mao were nothing more than militaristic, authoritarian thugs (fucking pukes).

Keep in mind when you talk about incentives for work that even when the rate was at 90% plus, there was no loss of incentive in the US. Things were going along pretty well at the time. The taxation spread was pretty good. A lot of wealthy people back then too. Just the overall distribution of wealth wasn't so skewed.

Also, just who deserves to make more than the rest of us? The Bushes? The Cheneys? That fat asshole who was the CEO of Exxon? They are fine examples of wealth in the wrong hands? I believe that only fair rules and regulations in the marketplace will assist the truly deserving to rise above the rest. Our current system has a lot of greedy scum at the top. I too believe what you said -- "some people deserve to make more than the rest of us" -- but it comes with certain caveats.

[bemildred]

29. Actually, it would be great.

The parasites are getting away with far too much, and it's causing great economic damage.

[BoneDaddy]

47. So if I worked incredibly hard

for my money I should be MADE to give that muc in percentage? BS

[bemildred]

50. If you worked incredibly hard for your money you would be a working stiff.

And you would not have to worry about this.

[BoneDaddy]

106. I am not sure what you are saying

Are you suggesting that people who make that kind of money don't work hard for it?

[kath]

129. That would be your MARGINAL tax rate -- you would not be paying nearly as much on your first $5

million.

Look it up, people -- "marginal tax rate"

[krispos42]

30. We need a flat federal tax

For singles, 75% on adjusted gross incomes of $75,000 or more
For married, 75% of AGIs of $125,000 or more.

Simple.

If your single AGI is $100k/year, then you pay $18,750 in taxes, or 18.75%.
If it's $200k/year, then you pay $93,750 in taxes, or 46.875%

[TahitiNut]

40. Any different for dividends or capital gains? Or just earned income?

:eyes:

[ProudDad]

87. The flat tax

is a HIGHLY regressive (dumb) idea...

Google "gravel forbes loonie tax plan"

[sandnsea]

31. In war time, nothing

No reason at all taxes shouldn't be raised.

I don't know when American workers are going to figure out the rich took our FICA money and invested in China, India and Dubai. They got richer, we got fucked.

[mvd]

34. See, I wouldn't be a HUGE taxer for many people

But when you get this high, all bets are off. Good point about war time. :thumbsup: I would be considered a big taxer in general because of where the "middle" is now, though.

[StudentLoanSlave]

35. I would stop working when I reached $4,999,999.99

[TahitiNut]

39. Funny thing... nobody did that. The incentive remained.

:shrug:

[StudentLoanSlave]

58. What incentive?

Every dollar I make over 5 million automatically turns into 10 cents under this plan. No thanks.

[TahitiNut]

60. When your income is that high, it's ten times as easy to earn each additional dollar ...

... as it is for a blue collar working schlub to earn his first. Climb on the clue train and realize that the 'reality' at that income level isn't the same as flipping burgers in the local cholesterol pusher's.

[StudentLoanSlave]

61. You're on the don't-have-a-clue-train my friend

One good insult deserves another.

I still would not have any incentive to earn more than $4,999,999.99 under the plan proposed.

What incentive would you have under this plan?

[TahitiNut]

63. Reading with comprehension is an essential skill.

I pity anyone whose choice to engage in any career endeavor is premised on such a perspective. :nopity:

:shrug:

[StudentLoanSlave]

65. Uhhhhhh.....WHAT?!! n/t

:shrug:

[davekriss]

80. That's OK, you neednot worry

It is highly highly unlikely that you'll ever reach that income level. Note we are, now, less class mobile than our European breathren. Unless you were born with a silver spoon in your mouth, you're talking of a world which you will most likely never enter.

[mainer]

113. People enter that world all the time... without silver spoons

Just in my circle of acquaintances, I know several blue-collar people who ended up multi-millionaires, through hard work or talent or luck or all three.

To imply that one can't become rich without being born rich is flat-out wrong.

[wuushew]

120. Your social circle is not represenative

A study by economist Tom Hertz of American University, “Understanding Mobility in America”, finds that a child born into a poor family, defined as the bottom 20 percent of the income distribution, has an infinitesimal one-in-a-hundred chance of making it into the top five percent income level.

Hertz’s report, issued by the liberal think tank the Center for American Progress (CAP), studied both “intergenerational mobility” and “short-term mobility.” Intergenerational mobility, comparing an individual’s economic status with that of his or her parents, is taken as a measure of equality of opportunity, since economic success independent of the status of one’s family would seem to indicate that merit and work are the principal sources of material rewards.


http://www.wsws.org/articles/2006/may2006/mobi-m20.shtml

[davekriss]

124. People do NOT enter that world "all the time"

"All the time" implies a probable event. It is highly improbable. The U.S. has less class mobility now than Europe. That means "less", not "none".

(Checking my "less class mobility than Europe", it turns out we have about the same mobility as the U.K., and less than northern Europe. I don't know how we fare against southern Europe. Peruse this site for more details: http://www.nytimes.com/2005/05/14/national/class/15MOBILITY-WEB.html?_r=1&oref=slogin )

BTW, my point is it is highly unlikely that anyone reading this will have to fret over the income levels we're talking about here. The 94% marginal tax rate referred to above applied to income above (in today's dollars) $4,000,000. What percentage of the U.S. population do you think earns over $4,000,000 per year? Certainly less than 0.5%, probably less than 0.1%. Given that there is a certain class-based inelasticity to incomes (see the NYT's site), what do you think the probability is that someone born into a family earning $30,000-$50,000 in today's dollars will end up earning $4 million? Much less than 0.1%, probably closer to 0.01% or less (much less).

So, to say earlier that it is not very likely that the poster above will have to worry about FDR-like top marginal rates is not "flat out wrong", it is common sense.

But, then, so many of us play powerball and the odds of winning that lottery are 155 million to 1. Go figure?

[Gormy Cuss]

82. So since other marginal tax rates would inevitably be part of such a plan

based on the way it has been done in the past, you'd be fine with pay 85 cents on the dollar for the earnings over 4M? Paying 75 cents on the dollar for the earnings between 3-4M? Paying 65 cents on 2-3M? That in simple terms is how it would work.

[ProudDad]

90. Sounds pretty damn good to me (n/t)

[Gormy Cuss]

97. Yeah, but you and I would be willing to pay the 90% rate on 5M plus

unlike the poster who claimed it would be a disincentive to working.

[ProudDad]

89. The same freakin' incentive folks had in the 50s and 60s

when that WAS the marginal tax rate!!!

And the country experienced the most prosperity for the most people ever experienced by a country in the HISTORY OF THE WORLD!!!

It was in part BECAUSE of the highly progressive income tax that was redistributed into the best education system, the most extensive infrastructure building program and the most leveled economic advantages ever!


My incentive during the 40+ years I worked in the computer business was my innate curiosity and interest in the work!!! The money NEVER an major incentive for me... I was driven by the love of the work and a desire to help other people...


In a mature, decent society your calculus would be that you'd STILL be getting $.10 out of each buck AFTER EXPENSES and you'd be giving something back to your community with the other $.90...

[mainer]

112. So would I. You'd be crazy to keep working.

Because you'd only be working for the government.

[Starbucks Anarchist]

37. No, but I do favor high marginal tax rates, if that's what you mean.

Just not 90%.

[lancer78]

41. My accountant

that does my taxes once told me about the 90% tax rate in the late 40's. He had just earned his CPA, and he told me that a lot of people didn't want to work because of the high tax rates. The people he was talking about just weren't the super rich, they were doctors and lawyers as well.

I think that no one should have to pay over 50% of their adjusted earned income in taxes. Heck, even Clinton had the tax rate at only 42%, 90% is absurd.

[Starbucks Anarchist]

43. 90% marginal tax rate is different.

That's the rate on every dollar above a certain amount.

Still, I think a 90% marginal rate is a bit high, at least if it starts at $5 million.

[JCMach1]

42. I would support a 90% death tax above that figure...

not on income however...

[eShirl]

123. What the hell is a death tax?

You must be thinking of an estate tax.

[kath]

130. Call it what it is - an ESTATE tax.

Don't use the fucking obfuscating language that the right wing assholes foist on us.

[BoneDaddy]

46. What's wrong?

How bout it is earned money people have worked hard for. I am for redistribution of wealth but that is ludicrous.

[Vidar]

48. It would discourage looting by the rich from the masses & is therefore unamerican.

[dansolo]

52. I'd rather see them eliminte the cap on FICA

[bemildred]

53. And make it progressive, i.e. increase the rates for higher incomes.

We're all in this together, right?

[JackRiddler]

56. What's wrong with zero percent income tax on anything up to $100,000

and 50 on everything above that?

[LWolf]

71. That's an interesting proposition.

Of course, I'd support it, because I wouldn't be paying any taxes.

How could it be worded to close all the loopholes inevitable for the privileged?

On edit: I assume this would be for federal tax, not state or Social Security.

Should states adopt something similar? Where should social security fit?

[JackRiddler]

74. You'd be paying taxes

FICA, State and municipal.

Also, higher prices through the introduction of energy and environment charges on manufacturing (and equivalent tarriffs). This is Paul Hawken's scheme and I think it's brilliant: create true prices by reintroducing the "externalized" environmental costs as economic costs to producers. They pass it on in price, which at last reflects the true costs of what we consume. The primary charge should be on hydrocarbon energy consumption, obviously. Hawken recommends a 20-year phase-in, I think that's too long given the crisis. You might end up paying the same in the end, but the money would come first to you and you'd decide how to spend it - or save it, even, there would be an incentive again for that old-fashioned activity.

This also makes up the shortfall from the elimination of income tax up to $100k (which far as I'm concerned can go to $150 or more if feasible).

Capital gains are taxed as income (home exemption).

And if you want a really crazy idea: an appointed board of economists with 10 year terms (who replace the Federal Reserve) decide how much deficit is allowable based on infrastructural investment impact on future growth. And instead of borrowing it from banks that issue fiat and collect interest, the government just issues the damned fiat itself, without adding to its (your) future interest payments on debt.

[LWolf]

76. THIS I like.

:loveya:

What are the chances of getting Congress, or the next POTUS, to listen?

I guess the question should be, where's the best place to start?

[JackRiddler]

77. Unfortunately...

We are talking about ways for capitalism to reform itself in a rational and self-sustaining fashion that produces the greatest good for the greatest number. Nevertheless, the system will not choose this route itself. Reformers are under severe limitations, as there is no room for them in the Democratic Party and a third party effort is a joke. A revolution ain't happening, or is unlikely. A collapse of the system is likely, but we'd be lucky if it leads to this manner of reform; the re-institution of Feudalism is likelier.

Anyway, if the fair-price tax idea interests you, pick up the classic, The Ecology of Commerce by Paul Hawken (a Kucinich adviser, besides being a very successful consultant on his own).

[LWolf]

78. Thanks for the rec; I'll add it to my list. n/t

[ProudDad]

91. I got no problem with that

if it's on the GROSS income...and includes capital gains.

We'd have enough to do the COMPLETE program...health care for all, free education through graduate school, 4-6 weeks of paid vacation, unlimited sick leave, 1 year parental leave

You know, all the shit that the civilized world already has!!!

[Thothmes]

107. Whats wrong

I make $100,0001 annually. My take home after taxes is $50,001. The guy working next to me, has a few months less seniority than I do. His pay is $99,999. His take home pay is $99,999. What is wrong with this picture?

[JackRiddler]

125. What's wrong with it is that you didn't get it.

As it's perhaps the fault of vagueness in my writing, allow me to rephrase:

Everyone gets a single, $100,000 exemption on their taxable income for federal taxes - no other loopholes. So if you make $10,000 or $100,000, you pay nothing. If you make $100,001, you pay 50 cents. That's kind of crazy sounding at that level, agreed, but the line needs to be drawn somewhere.

The point is that someone making 5.1 million pays 2.5 million. And everyone making $50,000 is no longer screwed (with a "low" rate, ha ha) just for working like a chump. Working for an income is no longer punished. But it's also no longer tolerated that others make a fortune and pay next to nothing. Get it?

The shortfall should be made up by environmental charges. People under $100 k will mostly end up paying a similar total in taxes, but with a voluntary dimension through prices that condition the market away from ecological disaster. Also with an incentive to save.

Get it?

[Thothmes]

126. I now see you point. Thank you.

[AngryAmish]

59. Because all the rich folks would move to Ireland

Or Monaco or Canada or some place that will not tax them at that rate.

[ProudDad]

92. Who needs the FUCKERS -- let 'em leave!

We will not allow them to do business here though...

[mainer]

110. Umm... if everyone who made over $100,000 emigrated...

(and let's be honest .. once you get onto this "tax the rich bastards" bandwagon, the cut-off for "rich bastards" will keep getting lower and lower until it's "everyone who makes more money than I do") you will end up with no doctors, no lawyers, no inventors, no entrepeneurs, no industrialists, no one left at all who has specialized skills in high demand.

[xchrom]

62. why is there any notion that people taxed at that rate still wouldn't be very rich?

this is what i don't get -- the rich will STILL be pulling in loads of dough -- even taxed at that rate.

as far as people going else where -- they didn't didn't do it then -- why would they do it now?

there are reasons for conducting business in countries with high tax rates -- and most first world countries have relativley high tax rates -- and they all still abound with wealthy citizens.

[Eric J in MN]

66. Fine with me. NT

NT

[DavidDvorkin]

69. What's wrong is that the percentage isn't high enough

[Evoman]

73. When you make over 5 million, the money just ceases to be useful

and becomes more of a way to keep track of your success. If your putting money back into your business, then maybe you should be taxed less. If you taking money from a business (especially by cutting employees and outsourcing), then tax away.

[yurbud]

75. because those who make over $5 million will send someone to squish your head?

[Rosemary2205]

79. BUUUUULLLLLSSSHHHHIIIITTT -- NO ONE EVER PAID 90% IN TAXES

Loopholes, tax incentives/shelters blah blah blah.

I called Bullshit on Reagan and I'm calling bullshit on the premise of this post. Sorry to the OP but it's got to be done.

[Mountainman]

81. Your right. Most wealthy people had things like real estate partnerships that they invested in.

They would put up about $5,000 and and get depreciation deductions on their K-1's that were a direct reduction of thier taxable income. The depreciation was a paper loss so the $5,000 came back to them in less taxes. The 90% rate was not applied to all thier income.

[Yupster]

101. Until 86 you could even have tax credit programs

that gave you an $ 8,000 tax credit over time for your $ 5,000 investment.

You are correct.

No one ever paid a 90 % tax rate in our country. In those days you could deduct hundreds of things that you couldn't deduct after 86. The idea of the 86 reform was to lower the tax rates but get rid of the loopholes. It pretty much did get rid of the loopholes. There aren't many left. Car loans no longer deductible, or any other interest but mortgage. Limited partnerships no longer tax beneficial nearly to the extent they were.

Going back to 90 % rates is a strawman. No one ever paid a 90 % tax rate.

[kath]

131. And no one ever paid 90% because it was a MARGINAL rate.

[TheUniverse]

88. If I knew that the tax rate on 5 million was 90 percent.

I would pack it up and move, I assume you'd have outrageous taxes for anyone who has 1 million also. I may not make a lot of money, but I have no kids to support, and I do a lot of investing. I hope to be a millionare, and if I knew I knew uncle sam was gonna take it all, I wouldnt bother.

[ProudDad]

93. And you're going to start making 5,000,000 per year

when? :sarcasm:

[TheUniverse]

94. If Im lucky when Im 60

Im 21 right now, and on average I make about a 50 percent profit each year in the stock market. If I could keep that up forever, may I'll be a millionare. ok maybe not.

[ProudDad]

103. That's capital gains

that's NOT earned income...

[wtmusic]

95. Better -- kick the corp tax rate back up to 47%

like it was 30 years ago and watch those executive salaries come back down to earth. It's corporations, not individuals, who should be shouldering more of the tax burden.

[debbierlus]

116. I like the way you think!

There are some common sense solutions to this problem. But, this is the type of post you see when we get into the class warfare that will start to occur in response to the extreme imbalance in wealth in the US.

[maui9002]

98. Several Reasons

1. Rates that high are confiscatory, which leads to all sorts of unanticipated and unwanted consequences. Many people who make that kind of money are valuable to our economy; rates that high would encourage them to either to move or invest more heavily in other countries to our detriment. Their highly paid tax advisors and lobbyists will work much harder (because it's in their economic interests to do so) to take advantage of or create new tax loopholes or deductions, which I believe is the real problem we face in our tax system.

2. I believe that rates that high ultimately will reduce the amount of tax revenue to the government.

3. If 90% above $5,000,000 per year is ok, why not 90% above $1,000,000$ Above $500,000? Above $250,000? If it's economic equality you're after, why not tax 100% of all income and return an equal amount to all working citizens who pay into the system? Of course, that's a ridiculous example, because our economic system is based on rewarding those who create or produce something that is more valuable than what is produced by others; and those of us who spend our tax dollars vote with those tax dollars (which is why American Idol for instance is more "successful" than say a science show on PBS--I can't defend other than to say it reflects what's important to us). Bottom line, just because someone makes more money, even lots more money, means they should pay a rate that is close to 100%.

4. The tax system has lots of problems that can be solved with changes that are more likely to be adopted: the estate tax should be retained but with a higher minimum; the different rates for earned income and investment income should be eliminated or at least narrowed; and a whole host of deductions for high income individuals should be reviewed and eliminated or scaled back--see David Cay Johnston's "Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich--and Cheat Everybody Else" for numerous examples. In addition, to offset the huge cost of the debacle in Iraq, perhaps we should consider a war tax that would be imposed most heavily on those who profited from the war (although there might be a constitutional issue there) or at least on very high income individuals, which might hasten the war's end.

[mainer]

108. best answers ever!

I agree with everything you said.

[debbierlus]

117. And, we currently do not have a government that would distribute the wealth for the greater good

We don't have a system that will responsibly spend that money. It will just looted in a different form.

[Trillo]

99. One of the flaws seems to be stepping higher / lower rates.

When one looks at any income and or wealth distribution, a curve that appears exponential seems to fit. Even examining the income to education disparity, between those of high-school and college, there seems to be an exponential factor to the wage distribution that is out of reason to the years of extra education spent.

If the goal is to lift up the poorest to lower middle, and bring the wealthier down to high middle, i.e., to reduce the extreme variance in wealth and incomes, it seems using an exponential tax rate that is not stepped in increments greater than single dollars (rounding off the cents) makes the most sense. Even rounding the cents isn't really needed with the advent of digital calculators.

It's quite interesting to view some on this thread who claim that 90% is too high, and others who say it isn't high enough. Perhaps that issue is best addressed with an exponential curve that isn't stepped. Why should 5 million be the magic number of a tax hammer? Why not just have a curve that slowly increases at lower levels, and that increases steeply at higher levels. It would seem made to order for smoothing out some of the excesses of greed as well as maximizing incentive for the masses at the lower end of the earnings scale.

It could be shifted so that those below some poverty level receive a negative tax rate through the typical (0,1) x to y axis point.

It just seems to me that defining what level of income is too high and requires a higher tax rate, but 1$ less than that deserves a lower tax rate, regardless of the level, is tailor made for abuse and evasion.

[ProudDad]

104. That's not a bad idea

as long as it goes asymtoptic at about 5 Mil... (above 100%)

[kineneb]

102. as someone who lives on $14K/yr... absolutely nothing.

The real prosperity of a nation comes when many people have enough money, rather than just a few. Giving tax cuts to the wealthy does not create jobs, it just makes them wealthier. Remember the old saying about money being like manure...?

Ah, here it is:
"Money is like manure, of very little use except it be spread."
Francis Bacon(1561-1626)


Tax them puppies.

[ProudDad]

105. Or as Jim Hightower said

trickle down is feeding the horses in order to feed the sparrows...

[debbierlus]

114. That is a bit ridiculous

Too high of a tax rate....

People can keep 8% of their earnings?

There is something called a happy medium.

[slackmaster]

115. $5 million isn't worth $5 million any more

It doesn't matter what number you pick to define as excessively wealthy - If your plan doesn't index tax rates to compensate for inflation, it's a non-starter.

Some day $5 million will be the median income.

[ProudDad]

121. You NEED to check this out

Tour of the
US Income Distribution,
"The L-Curve"

http://www.lcurve.org/images/LCurveFlier2003.pdf

http://www.lcurve.org/

[comtec]

118. Shoot to finx the system 90% isnt needed

just ENFORCE the current tax code, and REMOVE the 90k Soc Sec tax ceiling. That alone would bring the entire system into near balance (oh and STOP FIGHTING A STUPID FUCKING BLOOD WAR!!!!)

That aside, I'd say over 50% is fair for the crazy rich.
Remember this is a tax on YEARLY INCOME, NOT NET WORTH!
The way some of the posts are written it seems the confuse the two.


IF I were king... I'd set the min tax at 30k a year. Anything under and you are completely free form paying federal and Soc Sec taxes, lets face it, 30k in MOST states is nothing. You are struggling with a small family with that much.

Then gradate it from there. say 1% per 5k a year to a relative max of 45% at 225k, then no extra tax till 500k, then +1% per 20k up to a max of 90% (at whatever that ends up being) I give credit to Al Franken for the donut hole idea :)

Simple, dead simple, and most people could do it on a post card. And most people would get a sizable return.

Mind you that's on top of the usual pay roll tax BS. And the 90% should be a total combined tax. That is your fed+ state+ soc sec, etc, will never total MORE than 90%. The federal rate should always be lowered to bring it down to 90%

Mind yuo that's probably a little too sensical. The numbers should be twiddled however will make it fair, but we need a higher top tax and actual enforcement of CORPORATE TAX LAWS!

[ProfessorGAC]

119. Nobody Paid That

The problem with it, mostly, is that it encourages off-shoring of cash and investments. This takes money out of circulation within the country and reduces monetary velocity.

If this happens, (as in .late 50's), either overall productivity must fall, or new money has to be printed, reducing the value of the money and increasing the price, but not value of goods and services.

It encourages cheating and creates enormous inflationary pressures after a few years.

Other countries with very high tax rates tend to "earmark" the various income reductions. The part paid for gov't run medicine is not general fund money for instance. The version of Social Security is also more "lockboxed" so to speak.

So, while overall taxation may be very high, the discretionary money is not much different than it is here in the U.S.
The Professor

[ProudDad]

122. This obscenity MUST be ended!!!

Tour of the
US Income Distribution,
"The L-Curve"

http://www.lcurve.org/images/LCurveFlier2003.pdf

http://www.lcurve.org /

[leftofthedial]

127. make it 100% over $1 million

but I'd support your idea too

[Tierra_y_Libertad]

128. Unfortunately, the guys who could make it happen are millionaires.

And, they're a helluva lot more likely to protect their wealth, and seats in congress, by taxing the middle class into oblivion.