Actually, it goes as high as 2.5%. As for “economically possible”:
We tax wealth all the time. Ad valorem taxes.
But we could also tax large estates at a much higher rate, and make our income tax much more steeply graduated.
Like Willie Sutton did or didn’t say. That’s where the money is.
Again, you get to the problem of Congressmen being rich. They will make loopholes for themselves at the very least, and those are taken advantage of by others.
We;ve never had an effective tax rate above 35%. No point in even considering a rate higher than that.
That’s what we have. What do you want to change it to?
That’s Spain, not exactly a good example of strong economic policy. France’s makes more sense, and it’s from 0.5% to 1.5%. These are pretty small numbers. I wonder how much revenue they raise?
You’ll notice that while France taxes the rich, they also tax the hell out of everyone. That’s what it takes to have a generous social safety net. There’s no way around increasing middle class taxes. A lot.
A much higher top rate, for one thing. I know how Republicans hate deadbeats, and if we get serious about taxing estates, we could eliminate a whole class of them: trust fund babies.
Not a problem if the Congressmen in question owe their position to their pledge to fulfill the contract.
Anyhow, we’re getting off track. How about some more ideas:
- Make student loans dischargeable in bankruptcy after a set number of years.
- Prevent banks from changing credit card rates without the express consent of the consumer.
That’s why you’d have to be very specific and probably make tax reform part of the deal. Say, 50% rate, no deductions if you’re income exceeds say, $250,000.
Here’s the problem though: the only people who would sign it would be people who weren’t rich. So you’d need to recruit a lot more non-lawyer candidates, which the Democrats have never really been inclined to do. Lawyers have two attributes which make taxing the rich hard: they are rich themselves, and they are good at creating loopholes. So the “party of the working class” would need to start recruiting more Joe the Plumber types and fewer John Edwards types.
Now you’re talking! I’d support both of those. Tax debt should also be dischargeable in bankruptcy.
However, if student loans are dischargeable, the interest rate charged must be commensurate with the risk. The reason student loans are profitable despite such low rates for bad risks is that the government can garnish your ass. End that, and rates must go up or else taxpayers have to pony up more money.
There are plenty of rich Democrats who are willing to be taxed. Thanks, though, for your “helpful” critique, adaher.
Now let’s think about some more proposals, shall we?
Perhaps you should look at the actual tax rate prominent Democrats pay, and how many have IRS troubles. In practice, they are willing to pay a LITTLE bit more, maybe. You have to distinguish between rhetoric and action. Democratic politicians are rich, and their friends are rich. When their friends ask for a favor, they get it. That’s why in the real world, the rich pay about 15-25%, depending on how they make their money. The top tax rate is 39.6%. Raising that to 50% while keeping the loopholes in place won’t increase revenue much, it will just shift more money towards places that are protected in the tax code.
How about this? End the deductability of state income taxes.
I think it’s time to end student loans as a for-profit enterprise. It is high time to burst the student loan bubble.
I don’t see the popular appeal here.
Didn’t the government already take over the industry in 2010? It is profitable for the government, because the loans are going to be paid no matter what, and serious late fees are imposed for delinquency. But if they can be discharged, then it will be a pretty big net loss for taxpayers.
True. I mentioned it to highlight the fact that there are a lot of tax loopholes sacred to the Democratic base. Another example is the tax-free status of muni bonds. Democrats want cities and states to be able to raise money easily. But the higher rates are, the more money rushes into munis. You can’t tax the rich more without eliminating that loophole. And many others. It’s just too easy to evade taxes. The AMT helps, but the AMT’s rate isn’t particularly oppressive.
I agree completely and if anything am inclined more in this direction considering I am socially conservative on a few issues (especially abortion) but the difference is SSM and pot legalization has majority support.
- Removing the payroll tax cap for Social Security and abandoning all attempts at privatizing it
- Raising the minimum wage to somewhere in range of 10-12 dollars and indexing it to inflation
- Guaranteed paid vacation, sick leave, maternal leave etc. for workers
- Thoroughgoing health care reform transforming it along German lines
- Tax reform and simplification-elimination of tax loopholes. The VAT might be doable since as Michael Lind pointed out in one of his essays its less noticeable (like the payroll tax) since its a onetime thing rather than a constant irritant like the sales tax. This will be especially true if we eliminate regressive state and local sales taxes along the way.
- Energy independence cum infrastructure renewal projects that piques the public interest through high publicity prestige projects
- Pot legalization and ending Drug Wars in general. Streamline the death penalty along Japanese lines to tighten its criteria but expediate the process for it.
- Copyright reform
- Immigration reform that grants a path to citizenship for current illegal immigrants in exchange for a fine and background check while adopting a Canadian-style points-based system for the future and increasing prosecution of employers using illegal immigrants.
10 Banking reform: restore Glass-Steagall and/or implement “Too Big to Fail” legislation - Essentially declare neutrality on most social issues like gun control and abortion letting individual Democrats vote their conscience.
Good stuff, except for the first and last. The payroll tax cap issue is problematic since it sets in pretty low. That’s a very significant tax increase for a big part of the democratic base, especially in the more well off blue states. Not a 60% issue when you get into the details.
The last, as I’ve contended before, goes to the core of who the Democrats are right now. Changing into a purely economic populist party that deemphasizes social issues will cause the coalitions to shuffle. The democrats will win more white working class voters and lose more white professional voters. Giving up on abortion would cost the Democrats’ their advantage among women voters.
What does that do to the interest rate? Remember, it’s low now because they are NOT dischargeable. You can’t change one aspect w/o changing the other.
Again, you need to understand what this would do to current rates, but it’s probably a good one to add to the list.
One thing for sure, is raising the MW. That gets in the 80% + range of support. Raise it to whatever rate gets you to the 60% support level.
Also, cut military spending. Not in half, but whatever amount is supported by the magic 60% number. I would guess that would be in the 10% - 20% range.
Not sure SSM should be in there. People support it, although not at 60% and it’s unclear if they would support a federal mandate for SSM.
BTW, maybe you should revisit the 60% threshold. What you really want is 90% of Democrats and maybe 25% of Independents. You’re going to lose at least 90% of the Republicans no matter what.
Here’s another thing to consider: There are just too many red statehouses in America now. The national Democratic Party needs to refocus its efforts on winning state legislatures and governorships. What can we put in the Contract that might help that along?