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Kuros
Joined: 27 Apr 2004
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 Posted: Wed Nov 23, 2011 8:43 am Post subject: Doubling taxes on the rich |
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A new paper suggests that the ideal tax rate for the richest Americans is 70 percent -- double the current top marginal rate.
Let me be clear: I am against a 70% tax rate on any bracket of income. I am only for a restoration of the Clinton top rate of 39.xx%. Its unlikely that Clinton-era tax rates (reset for EVERYONE) would be bad for economic growth.
But lets play with a 70% upper tax rate (remember this would be Federal only).
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1) If you want to make the whole country better off, the rich should pay more taxes, because one more dollar (or, the next "marginal dollar") is more valuable to somebody making $201 a week than to somebody making $20,001 a week.
2) If you want progressive taxes, the optimal top rate is the one that raises the most amount of money.
3) That rate isn't 100 percent, because at that level, people stop working, hide money, or move out of the country. The right rate isn't 10 percent either. Even if you encourage people to make boatloads of money, it's too low to raise much revenue. So the ideal level is somewhere between 10 percent and 100 percent.
4) According to a new Journal of Economic Perspectives paper on taxes by Peter Diamond and Emmanuel Saez, the ideal tax rate for soaking the rich -- i.e.: the number after which higher taxes discourage work and/or shrink the base of taxable income -- is 73 percent. |
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Steelrails
Joined: 12 Mar 2009
Location: Earth, Solar System
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| Posted: Wed Nov 23, 2011 2:23 pm Post subject: |
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| The ideal tax rate is one that is necessary to pay for the required functions of government, which ideally should be kept to no more than essential services (although a few large-scale projects and stuff like parks are fine as well, even though they aren't quite 'essential'). |
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Leon
Joined: 31 May 2010
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| Posted: Wed Nov 23, 2011 3:47 pm Post subject: |
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| How do you decide what is essential thought? Social Security is essential to old folks, but doesn't mean anything to me. A lot of people would argue that spending 3-4% of our gdp on the armed services is necessary, etc. I am a citizen of one of the most powerful countries of all time, and your trying to say that maybe, just maybe, we can have a few parks?? There is no reason that, if we get the money away from subsidies and special interests, America shouldn't have the best infrastructure, physically and socially, in the world. |
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UknowsI
Joined: 16 Apr 2009
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| Posted: Wed Nov 23, 2011 6:05 pm Post subject: |
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| What is ironic is that while the US use social democracies/socialism as a phrase to scare their children, the US tax is now comparable with the social democracies in Europe. We used to always think of the US as a place with low tax and high competitiveness but less of a safety net. Where you are able to make a big profit if you do well because of the low taxes, but without a government to hold your hand. But these days it seems like it is a place with high tax and less welfare. Maybe Korea is the new US, with low taxes and little welfare. |
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TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
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| Posted: Thu Nov 24, 2011 3:50 pm Post subject: Re: Doubling taxes on the rich |
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| Kuros wrote: |
A new paper suggests that the ideal tax rate for the richest Americans is 70 percent -- double the current top marginal rate.
Let me be clear: I am against a 70% tax rate on any bracket of income. I am only for a restoration of the Clinton top rate of 39.xx%. Its unlikely that Clinton-era tax rates (reset for EVERYONE) would be bad for economic growth.
But lets play with a 70% upper tax rate (remember this would be Federal only).
| Quote: |
1) If you want to make the whole country better off, the rich should pay more taxes, because one more dollar (or, the next "marginal dollar") is more valuable to somebody making $201 a week than to somebody making $20,001 a week.
2) If you want progressive taxes, the optimal top rate is the one that raises the most amount of money.
3) That rate isn't 100 percent, because at that level, people stop working, hide money, or move out of the country. The right rate isn't 10 percent either. Even if you encourage people to make boatloads of money, it's too low to raise much revenue. So the ideal level is somewhere between 10 percent and 100 percent.
4) According to a new Journal of Economic Perspectives paper on taxes by Peter Diamond and Emmanuel Saez, the ideal tax rate for soaking the rich -- i.e.: the number after which higher taxes discourage work and/or shrink the base of taxable income -- is 73 percent. |
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I would say that at a 70% tax rate the objections of 3 still stand.
Personally if I were a rich American and I was being taxed at 70%...I'd renounce my citizenship and move out the country the instant I could get citizenship elsewhere.
Heck in Canada I was getting taxed at less than half that and it was still a big factor in the move to Korea.
Cut spending on wasteful government programs. Bring the troops home. Require the banks and corporations who received TARP money to pay it back*...if they can't pay it all back at once then work out a repayment plan and charge them interest (just like on student loans for example)
And I would cap any raise on taxes for the rich at 40% max.
Put all those things into the mix and you are looking at a trillion dollars or more. That should plug some serious leaks in America's finances.
*And I mean really pay it back
http://www.nationalreview.com/corner/242731/did-tarp-money-really-get-paid-back-kevin-d-williamson |
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Kuros
Joined: 27 Apr 2004
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| Posted: Thu Nov 24, 2011 4:36 pm Post subject: Re: Doubling taxes on the rich |
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| TheUrbanMyth wrote: |
| Kuros wrote: |
A new paper suggests that the ideal tax rate for the richest Americans is 70 percent -- double the current top marginal rate.
Let me be clear: I am against a 70% tax rate on any bracket of income. I am only for a restoration of the Clinton top rate of 39.xx%. Its unlikely that Clinton-era tax rates (reset for EVERYONE) would be bad for economic growth.
But lets play with a 70% upper tax rate (remember this would be Federal only).
| Quote: |
1) If you want to make the whole country better off, the rich should pay more taxes, because one more dollar (or, the next "marginal dollar") is more valuable to somebody making $201 a week than to somebody making $20,001 a week.
2) If you want progressive taxes, the optimal top rate is the one that raises the most amount of money.
3) That rate isn't 100 percent, because at that level, people stop working, hide money, or move out of the country. The right rate isn't 10 percent either. Even if you encourage people to make boatloads of money, it's too low to raise much revenue. So the ideal level is somewhere between 10 percent and 100 percent.
4) According to a new Journal of Economic Perspectives paper on taxes by Peter Diamond and Emmanuel Saez, the ideal tax rate for soaking the rich -- i.e.: the number after which higher taxes discourage work and/or shrink the base of taxable income -- is 73 percent. |
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I would say that at a 70% tax rate the objections of 3 still stand.
Personally if I were a rich American and I was being taxed at 70%...I'd renounce my citizenship and move out the country the instant I could get citizenship elsewhere.
Heck in Canada I was getting taxed at less than half that and it was still a big factor in the move to Korea.
Cut spending on wasteful government programs. Bring the troops home. Require the banks and corporations who received TARP money to pay it back*...if they can't pay it all back at once then work out a repayment plan and charge them interest (just like on student loans for example)
And I would cap any raise on taxes for the rich at 40% max.
Put all those things into the mix and you are looking at a trillion dollars or more. That should plug some serious leaks in America's finances.
*And I mean really pay it back
http://www.nationalreview.com/corner/242731/did-tarp-money-really-get-paid-back-kevin-d-williamson |
TUM, admitting that the Fed gov't could raise tax rates on the upper bracket to as much as 40% would make you left-wing in the US.
Note that the average Bush tax cut tax break for the 1% in America exceeds the mean income of the 99%: source.
I really like how OWS is mainstreaming concern about economic inequality. But frankly, anyone making over $50k should pay more taxes than they are now. |
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TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
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| Posted: Thu Nov 24, 2011 5:02 pm Post subject: |
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My concern over higher taxes is summed up by this link though.
http://www.taxfoundation.org/blog/show/24944.html
You have the top one percent paying more tax then the bottom 95%. They pay around 40% of all taxes which according to the link is the highest percentage in modern history. Also
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| "Some in Washington say the tax system is still not progressive enough. However, the recent IRS data bolsters the findings of an OECD study released last year showing that the U.S.�not France or Sweden�has the most progressive income tax system among OECD nations. We rely more heavily on the top 10 percent of taxpayers than does any nation and our poor people have the lowest tax burden of those in any nation." |
Besides which the more money you make doesn't always mean the more money you have to be taxed on. Debt has to be taken into account as well. |
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Unposter
Joined: 04 Jun 2006
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| Posted: Thu Nov 24, 2011 5:20 pm Post subject: |
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What's interesting about the article and the research is that they calculate that you could have a 70% tax bracket BEFORE there would be a disincentive to work.
Don't ask me how they figured that out but that is what they claim they have.
So, you could raise taxes up to 70% but you certainly wouldn't have to.
In a progressive tax system, obviously, no all income would be taxed at that rate. And, you certainly wouldn't want to just double taxes over night. But, you could slowly move in that direction and that seems absolutely necessary for the U.S.
And, the top 1% pays 40% of all the taxes - to which I say SO WHAT?
They also earn like 25% of all the income so in a progressive tax system, 40% isn't all that much and when you consider the top 1% gets almost all the capital gains, it is well under-represented.
And, if anyoen wants to give up their citizenship, I say don't let the door hit you in the rear. |
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Steelrails
Joined: 12 Mar 2009
Location: Earth, Solar System
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| Posted: Thu Nov 24, 2011 7:53 pm Post subject: |
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| I am baffled at the belief that you can tax a people into prosperity. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Thu Nov 24, 2011 7:58 pm Post subject: |
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| Steelrails wrote: |
| I am baffled at the belief that you can tax a people into prosperity. |
What about tax cuts all the way down? Is that going to stimulate growth?
Show us you can think in more than talking points. |
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Leon
Joined: 31 May 2010
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| Posted: Thu Nov 24, 2011 9:17 pm Post subject: |
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| Steelrails wrote: |
| I am baffled at the belief that you can tax a people into prosperity. |
Throughout American history, we've had the best economic times when the rich were taxed the highest, and the worst when it wasn't so. I know that some people don't believe in evidence.... |
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sirius black
Joined: 04 Jun 2010
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| Posted: Thu Nov 24, 2011 9:32 pm Post subject: |
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When has anyone who was very very rich ever paid the full tax rate? Who do you think writes the tax code? Buffet is one notable example, the others are similar. There are so many write offs and loopholes that I would be amazed if the rich pay the same rate as the middle class after all is said and done.
I am not saying the rich should have their taxes doubled. I'm saying that it means nothing. Unless the loopholes are closed.
I think taxes should be lowered generally for everyone but and only if the loopholes are closed.
Cuts in spending needs to be done as well. I don't agree its an either or proposition. BOTH needs to be done. |
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TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
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| Posted: Thu Nov 24, 2011 11:00 pm Post subject: |
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| Leon wrote: |
| Steelrails wrote: |
| I am baffled at the belief that you can tax a people into prosperity. |
Throughout American history, we've had the best economic times when the rich were taxed the highest, and the worst when it wasn't so. I know that some people don't believe in evidence.... |
I believe in evidence...on the other hand it has to be posted first though...  |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Fri Nov 25, 2011 8:02 am Post subject: |
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But lets play with a 70% upper tax rate (remember this would be Federal only).
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Personally, I prefer the 90% rate under Ike, but I'd be willing to consider 70% in return for a concession from the neocons not to bomb Iran and to cut a handful of aircraft carriers...or maybe to lay off abortion...or how about geting over gay marriage...laying off voter suppression...campaign finance reform...
I'd be open to an opening right-wing negotiating bid.
JFK reduced taxes, then LBJ started the War on Poverty (a good thing) and expanded the war in Vietnam (a bad thing) without paying for it. Then Reagan doubled the national debt to pay for his anti-Soviet campaign. I say: Pick a year back there between 1964 and 1981...let's say 1970 for a compromise...and jack up taxes to the level that year for the next 41 years to pay for the loss of income that was lost in those 41 years. Then let the rates go down. |
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Leon
Joined: 31 May 2010
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