A near-verbatim discussion I witnessed.
Wow. This article says Democrats are shooting for the equivalent of a 62% top tax bracket.
This article is misleading. “...combined federal and state top tax rate on earnings of 62%. That's more than double the highest federal marginal rate of 28% when President Reagan left office in 1989.”? Of course state and federal taxes together add up to more than federal taxes alone. Moreover, he's comparing state plus federal taxes PLUS a surtax to just the federal tax&hellips;from 25 years ago, when the highest rate kicked in at a much higher income breakpoint than it does today. This guy thinks his readers are idiots.
So what should taxes be?
In my opinion, the top marginal rate should be somewhere around 97% but only apply to those that maintain overseas holdings of more than a million dollars. Capital gains tax and property taxes for non-primary residences should be around 75%. Plus, companies should get tax breaks for contributing to science research and humanitarian aid, letting their land be used for wind/solar/hydropower, and paying their employees more than twice minimum wage. Yes, this would create “loopholes” that rich people could take advantage of, but they would have to actually invest in the economy and raise everyone’s standard of living to capitalize on them.
Thank you for actually answering with firm numbers. I regularly ask people just how much is the ‘fair share’ for the rich to pay, and I rarely get a specific answer. But I wonder how you can be okay with such outright theft, and I wonder how you think this country will compete internationally after major tax code changes remove tax breaks and put an upper limit on total cumulative deductions. Historically, the fastest way out of debt has been to grow the economy. That can’t happen if you take money away from the people who can grow it and give it to an inefficient and already-bloated government.
To equate taxes to “outright theft” is to deem everything funded or accomplished by any federal government a waste of resources. No one built the Internet, the highways, the Armed Forces, the electrical grid, the stock market, the nation’s air- and seaports, or the education system before the federal government did. Taxes in general are not theft until the effective rate gets ridiculously high, say, 90%.
If you look back at any time in history, in any country on the planet, past or present, you will see that national and international economies grew the fastest when taxes were highest. When governments collect more and spend more, everyone prospers. When the rich are able to keep more of their money, everyone loses — even the rich! In our own history, it happened in the 30s after the stock market crash, in the 50s after the war, in the 90s after Reagan and again in the last few years. There is no logical, evidentiary, or fiscal argument that can show any other result. There has never been. There are only the opinions of rich people who want an excuse to keep their money.
We are losing our ability to compete in the world because our taxes are too low. The U.S. is nowhere near the world leader nations in technological innovation, scientific research, medical research, space exploration, education (public, private, or collegiate), literacy, savings per capita, nutrition, or low personal debt. All these areas are victims of repeated federal budget cuts across the last 50 years.
No one ever said, “I have a million dollars that I could invest and make profit with, but I won’t do it because taxes are too high.” Maybe they shied away from risk, but that’s a different factor altogether. Higher taxes decrease investment risk by increasing the odds of businesses and government working in tandem, thus making it more likely that their initiatives succeed.
The rich in our country and around the world have such a staggeringly large portion of wealth that many people really have no idea how rich they are. We could take 90% of the wealth from the richest 2% of Americans and they would still be rich enough that they would never need to work a day for the rest of their lives. (I’m not advocating for that, I’m just illustrating a point.) There will never be a shortage of investable wealth in the world — just a shortage of confidence in their fellow Americans that the money spent will bring a return. That kind of distrust and cynicism is what causes the rich to hide their money in offshore accounts or look overseas for the cheapest, least moral labor force they can find.
How can you say taxes strengthen a country? Our country became the powerhouse it is without income taxes even existing until the 1860s. The issue over the past 50 years has been increasing Socialism. If we were serious about bringing jobs back home & making things fair, we'd do away with the income tax entirely & impose a national sales tax affecting everyone above the poverty line. This would promote savings and investment as well as properly distribute the tax burden heaviest onto those who consume the most.
At every level of income, both marginal and effective tax rates have fallen by half or so in the last 20 years. We have had plenty of time for low tax rates to fix our problems. They haven't. Arguing to reduce them even more, or to leave them where they are, is arguing against making things better.
There is no data to suggest that low tax rates grow economies, anywhere in the world, at any time in history.
Our country became the powerhouse it is because all of Asia and Europe were in tatters for 80 years after two world wars that were fought off our home soil. When you own the only non-bombed-out factories in the world, you can do pretty well for yourself.
Import duties don't work the way they did in the 1800s. Back then, you couldn't buy clothing, bread, cars, modular home components, personal appliances, or anything else from China and expect it to be cheaper than a locally-sourced product. Today, I can walk into an Asian market and buy ice cream that was made a week ago in Japan that costs less than two scoops at the parlor down the street from my house. When you apply import tariffs to foreign products, you can move sales over to American businesses, but only because you are causing American buyers to spend more than they would have otherwise.
I'm not saying you shouldn't buy American, but you have to expect that shoppers will try to get the most for their money, and we should not punish them for doing so. We need to find ways to keep our industries competitive despite higher labor costs, not simply raise prices across the board to bring everyone else up to our level. It would be great if it were cheaper to move parts and goods around the country so that our businesses could pay less for shipments. Oh, wait, that's why the federal government collects taxes to spend on the highway system. It would be cool if the costs of healthcare and benefits could be reduced, saving businesses thousands of dollars per employee. Oh, wait, that's why we're fighting for single-payer health care to allow the costs to come down across the country. And wasn't it a great day when we passed a socialist program that costs workers money now, while they are earning more, and then paying those same people money out of the system to cover living expenses one they are too old to work?
The most successful countries in the world, in terms of crime levels, personal debt, and quality of life, all tax more than those that don't. The big difference there is that it's not “big government” versus “small government” that the people debate; it’s the comparable effectiveness of government that matters. If the government can build a school and pay teachers with more efficiency and fewer hassles than a private company could, let them. If companies aren't paying enough people to produce art and advance the culture of the country, but this art is shown to have a positive effect on the mental health and morale of the people, then let the government hire and commission artists. (We used to do the same thing, you know.)
In the same way that you can buy 2 gallons of mayo at Costco because it's cheaper to buy in bulk, it's better for the government to pay for all of the nation's health care, or defense, or education, or infrastructure, or civic defense, or disaster relief, or food inspection, or border security, or savings insurance, etc. etc. etc. We should be demanding that the people in government spending our money do it more efficiently, for things we really need, not relieve them of their responsibility. In the name of “small government”, we've instead allowed private companies to take over things that actually are part of what we need the government to do — prisons, warfare, regulatory agencies. In many cases, the results are of less quality and higher cost.