I love George Harrison, but I think 95% is a reasonable rate at very high margins. Perhaps it should not have been the rate the Beatles paid on their income at the time, but it is reasonable in theory, on income some orders of magnitude above the mean.
You’d be wrong. The total share of wealth held by the richest Americans has been falling for some time. I’ve posted on this numerous times. It was higher than it currently is at points in the 1920’s, the 1960’s, and the 1980’s and 1990’s. The overall trend line from 1929 on is slightly down, but could be said to be essentially flat. It tends to go up in boom times, and down in weak economies.
No, it’s not. Aggregate wealth increases constantly. When two people trade, they aren’t swapping pieces of the pie. That would imply a winner and a loser in every trade. In fact, people trade when they both feel they are gaining value, which means aggregate wealth is increasing.
So would you be happy with a society where the poor has less than they have now, but the rich have much less? It would be more equitable.
That’s been the result in most socialized countries. The gap between the rich and poor is smaller, but they sacrifice economic growth for that, and ultimately wind up with lower standards of living.
Are you also willing to go without as much innovation, as many new products, as much scientific research, and fewer opportunities for your children to rise to the heights of the economy?
And if two countries start at a GDP level of $30,000 per person, and one of them lags the other by just 1% of GDP growth because of its socialist policies, then in 50 years the first country will have $30,000 per person, but the second will have $49,000 per person. And that’s pretty much what’s happened with the U.S. as compared to Europe and Canada. Less socialism, more growth.
I think you mean well, but I think you are in error here. I recommend reading some of Paul Krugman’s popular works to get a better handle on this, but I’ll just try to hit two points:
Politics is often an ideological game of telephone; politicians try to give you what they think they understood you to say you want. Your beliefs can be twisted by politics into robber baron Social Darwinism, which does not spread prosperity around.
In the USA, the middle class as defined by income range grew most in the 1946-1960 period, when tax rates were as high as they have ever been in the USA. High taxes can feed high spending, which can grow the economy. Free markets aren’t automatically better than a corporatism or dirigisme, provided the corporatism is run with the public interest as top priority.
Sigh. No, Bob, it won’t fuck the economy up worse. Quite the opposite as a matter of fact.
But the chances of it happening are slim because Congress doesn’t want to give up the games they can play with the income tax, where they slip exemptions to their buddies and screw everyone else.
First, I don’t think “allowing people to go hungry” is entirely relevant. That sort of decision has more to do with a government’s priorities. Do you need 11 carrier battle groups, or 12? Do you set your Medicare qualifying age at 65 or 60?
Secondly, your comment about “second yacht” is short sighted and needs to be addressed. We need the rich to buy stuff. That second yacht puts a damn lot of money into the economy, right off the bat the government gets sales tax from it. People are employed to build it, materials are purchased to construct it. And staff is required to maintain it.
Your tax policy just cut the yachting industry in half! Think about that for a second. You wanted to help the poor, but by taxing the rich more, you effectively destroyed the yacht building and maintaining industry (yes, I’m being overly dramatic to make a point). Now you’ve added to unemployment and poverty (more costs), but also reduced your overall tax revenue. Sounds like you’ll need to raise taxes on the rich again.
What would you prefer? What one “deserves”? How does one even define that in the real world?
Since “We the Living” is set in the days of the Bolshevik Revolution, I would guess that some of the injustices it describes are due to the peculiar flaws & circumstances of that revolution. (I can admire Bolshevik ideals of egalitarianism while recognizing that the October Revolution had its horrors.)
But to try to equate the excesses of Bolsheviks with all social democracy, all redistribution, all progressive taxation everywhere–or with any consideration of public “need” as primary–is as silly as a Bolshevik equating any private property ownership with feudal overlords.
Don’t make the mistake of being as uncompromising as a Bolshevik because of the Bolsheviks!
What is, “earned”? In a market economy, one makes money according to negotiation, not work itself. That’s what makes it a market economy. Taxes are another negotiation. If you want a production economy, a shop economy, or something, where money is paid according to one’s personal sweat equity, you…well, you should be a Bolshevik.
So you don’t think having 40 billion dollars is enough of an incentive to become rich, we need to throw tax breaks on top of that?
Right because being super-rich is something you have to create incentives for.
I once thought you had a problem with progressive taxation, now I see you even have a problem with proportional taxation. Why not just propose a head tax with generous exclusion for the poor?
You are basically talking about eliminating our revenue from the top 1% (which accounts for about 20% of our revenue.
Assuming we don’t have stimulus packages every year, our regular annual budget is about 3.2 trillion dollars, our reciepts are about 2.7 trillion. IOW we are running a deficit or about 500 billion/year. You propose to reduce our revenue be an additional 500 billion to make our deficit a round trillion/year and to cut costs to balance out the budget.
Social security, medicaid/medicare, military/national security and the interest on the national debt account for between 80 and 90% of the budget.
You are looking to cut about 30% of the budget. Please explain to me exactly where you think you are going to be able to cut a trillion dollars so that we can give the ultra-rich the tax cut you are talking about?
I don’t know how to break this to you buddy but the middle largely carries the tax burden in this country right now. the top 1% may carry 40% of the income tax buerden but the next 49% carries the other 60% and they also carry a lion’s share of other taxes.
The money that would have gone towards that second yacht doesn’t just disappear, instead it’s spent on what society considers as having a higher priority. Yacht dollars become health care dollars instead.
In theory, if the CEO wants that second yacht so badly a higher marginal tax rate could give him incentive to work even harder so that he can afford it. Who’s to say it won’t increase productivity?
We have a system where there is no upper limit to what one individual may earn so there is no upper limit to what they are expected to pay.
The problem is that the income distribution is shifting. More than 10% of Americans are on food stamps, another 5% receive other forms of government assistance, the majority of babies born in this contry receive some form of government aid (it is frequently to pay for medical costs and stops shortly after birth but that is how many people are living so close to the edge that they need the government to help when they have a baby).
The rich guy can leave the table any time he wants.
You seem to be under the impression that the middle 75% is living better than they earn on the backs of the top 1%. Once again, the income tax is not even half the federal revenue.
I’d like to point out that Social Security is already payed for in the way that emacknight envisions (income after $106,800 is exempt). Medicare used to have a similar exemption until 1994.
Of course it does, are you under the impression taht the labor markets allocate income equitably?
Yeah, yeah, we get it, taxes distort behaviour. So? I don’t think anyone is arguing that high taxes are a good thing. The question is how the tax burden should be distributed.
That sounds like we should eb warming up for a race to the bottom.
Dude, we’re talking about raising the top marginal tax rate from 35% to 39.6%. We might even raise the capital gains and dividend rates from 15% to 20%.
You mean like how our top marginal income tax rates exceeded 70% for most of the last century? Or how we once had marginal income tax rates as high as 92% but still experienced robust growth? Its all a bit more complicated than tax=bad.
Yeah, yeah, low taxes>high taxes. We are talking about how that tax burden gets distributed.
Is it possible that we are losing manufacturing because a Chinese laborer will work for $10 a day while a US worker needs that much per hour? Is it possible that it isn’t taxes that drove just about every manufacturing job in the world to China?
In order to maintain our position going forward, we need a large robust middle class that can develop enough human capital to jsutify our standard of living relative tot he rest of the world. Noone wants to throttle productivity but the amrket seems to be allocating income from productive activity to fewer and fewer people.
Where do the rich get their wealth? Do they sweat platinum? No. They make money from the rest of the economy. And a stock dividend paid from the productivity of a company is as good as a tax, though “private.”
Let me turn it around, then. Is there no upper limit to how much of the economy one individual is expected to direct through his accounts?
Is this predictable? Is it even a direct function? I reckon Yanks break the law to avoid lower taxes at a higher incidence than Europeans break the law to avoid higher taxes. (Granted, Europe has Sark & Monaco; we just have Delaware.)
But if capital is allowed to move at all, there will ALWAYS be capital flight & race to the bottom. This is an argument either for international cooperation (collusion?) on tax rates or for protectionist policies against moving capital. It is not remotely an argument for unilaterally lowering tax rates, unless one wishes to sabotage other countries (a little) & one’s own (a lot).
This doesn’t mean what you think, you’re conflating psychological “incentive” with the economic use of the term. A man who makes less money per annum has less incentive (economic) to show up for work, but more incentive (psychological)–because he has less cushion to fall back on without the job.
This is an incredibly strong argument for global norms in taxation if not world government itself.
Or the government could fund entrepreneurs with grants.
It’s been easier for the South to grow, inasmuch as it’s just catching up. If Haiti were to be straightened out & join the First World, it would have enormous economic growth while still being poor & sick in comparison to Europe.