5 Reasons the Top Tax Rate Should Be 80 Percent

[eridani]

http://www.commondreams.org/views/2016/02/15/5-reasons-top-tax-rate-should-be-80-percent

1.. Massive Redistribution Has Occurred. Upward.

Total U.S. wealth increased by a stunning 60 percent since 2009, from $54 trillion to $86 trillion, but 3/4 of that massive increase went to the richest 10% of Americans. According to the New York Times, the wealthiest Americans have formed an "income defense industry" to shelter their riches, with, "a high-priced phalanx of lawyers, estate planners, lobbyists and anti-tax activists who exploit and defend a dizzying array of tax maneuvers, virtually none of them available to taxpayers of more modest means." From 2003 to 2012 the average income tax rate paid by the richest 1% went down, while for the 99% it went up.

2. Subsidies to the Rich are SIX Times Greater Than Subsidies to the Poor

The cost of the entire Safety Net is only about ONE-SIXTH of the $2.2 trillion in tax expenditures, tax underpayments, tax havens, and corporate nonpayment, the great majority of which went to the richest Americans.

3. The Super-Rich are the Main Beneficiaries of Our Nation's Prosperity

All the technology in our phones and computers started with government research at the Defense Department, the National Science Foundation, the Census Bureau, and public universities. The Internet made possible the quadrillion-dollar trading capacity of the financial industry. Google is using some of its billions to buy technologies that were built by DARPA with our tax dollars. Pharmaceutical companies wouldn't exist without money from the taxpayers, who have provided support for decades through the National Institutes of Health, and still pay over 80 percent of the cost of basic research for new drugs and vaccines. Big firms use intellectual property law (another gift from the taxpayers) to snatch up patents on any new money-making products, no matter how much government- and university-funded research went into it.

[Wilms]

1. ^

[librechik]

2. give them deductions for investing in infrastructure and raising wages

So they don't complain about the high tax rates. They have a choice to improve things or pay the money. nThat was the deal with the 90% rate back in the fifties.

[pampango]

3. 4. Progressive Taxes Actually Work

The prominent economic team of Piketty and Saez and Stantcheva determined that "the top tax rate could potentially be set as high as 83%" before the highest earners are discouraged from attempting to earn more. The National Bureau of Economic Research goes further, proposing a top marginal rate of 90%, and even some conservative analysts concede that the optimal maximum may be at least 50%.

Since the 1970s libertarians and business leaders have rallied behind trickle-down theory. Thus a series of tax cuts for the rich. But evidence from numerous sources leads to the conclusion that there is no correlation between tax cuts and GDP growth, and that in fact the cuts cause governments (as common sense would dictate) to lose revenue.

5. Higher Taxes Won't Make Rich People Leave

During the Republican debates Chris Christie claimed that higher taxes caused wealthy New Jersey residents to leave the state. It's not true. A Stanford study found that lower-income residents left New Jersey at approximately the same rate. "Overall," said the authors, "higher income earners show greater residential stability and geographic embeddedness than do low income earners."

A Conclusion: The Washington Examiner referred to Bernie Sanders as an "elderly extremist." Elderly, yes. But as Democratic debate moderators noted, over two-thirds of Americans favor increased taxes on people making over a million dollars. The desire to reduce inequality is not extreme at all.

Great article.

[gd770226]

4. NJ

People are leaving NJ because of the taxes. The biggest class of people leaving the state is people who are retiring. It is almost to the point where nobody retires in NJ. If you are rich and retire you leave NJ to avoid the taxes just because you can. If you are middle class and retire you leave NJ to avoid taxes so that you can afford a decent retirement. If you are poor you get the hell out of NJ just to be able to afford to live. The average NJ property tax bill is no > 8K. Most people can't afford that. It really has become a state where you either do very well or you struggle just to get by.

Police, Fireman and teachers are a huge class of workers who retire out of NJ. They take their very generous NJ pension and retire to a cheaper state. I don't blame them, but it isn't good for the state of NJ. The pension problem that the state is facing is absolutely a huge issue. This will be a big issue in the next election and it will be interesting to see if anybody can come up with a plan that may actually fix the issue and fix it with a good solid long-term fix.

So I don't think Christie is wrong when he says that the wealthy are leaving the state. It's everybody that can. The only thing keeping the state population from shrinking is the influx of immigrants. So over the next 10-15 years it will be interesting to see what happens in NJ. It isn't going to be pretty. I'd leave in a minute if I could, but I have child support to pay. I don't have the option to move to a cheaper state. Personally I could live in a lower income state, but I would still have to pay child support at the NJ rate, so it just wouldn't work.

[meow2u3]

6. That's nothing but an extortion attempt on the part of the superrich

This crock of shit about people, especially rich people, leaving NJ because of taxes reads like a childish extortion attempt where a kid threatens to take his ball and go home unless he gets to make all the rules.

[gd770226]

9. OK

Ok, so if it isn't high taxes and high cost of living like I pointed out, then what is your explanation for people leaving NJ?

http://www.nj.com/news/index.ssf/2015/01/people_are_fleeing_nj_faster_than_any_other_state_moving_company_says.html

http://newjersey.news12.com/news/new-jersey-ranks-no-1-in-people-moving-out-of-the-state-1.9768730

http://www.mycentraljersey.com/story/news/local/new-jersey/2015/06/25/nj-white-population-decline-diversity/29291761/

[dmosh42]

5. I think it would be best to raise the capital gains to 30% and block overseas tax free loopholes.

It would give the greatest return to the government for financing programs needed by the country. Also removing the cap on Social Security would take care of any worries about that program. My whole life going back to the 40s has been about the rich complaining about being restrained in their pursuit of investments and their needed "exemptions" from responsibilities as an American citizen.

[TBF]

7. It has to be on capital gains or

you're just taxing the folks for high income - not wealth.

Currently I can't even write off my student loan interest because income is over their cut off - yet billionaires who have inherited every cent they have pay less and less in capital gains taxes. That's not fair. It used to be 100% on ALL income & now the uber wealthy are making out like bandits because every president since Reagan has decided to cut the tax on capital gains. It makes no sense.

[ProfessorGAC]

10. I Think We Tend To Forget Dividends

You and others mentioned CG tax rates, but the lowest tax rates of all are on dividends which means people don't have to actively trade to pull in major income and then pay the lowest rate of all.

That said, since many retirees depend upon that as a living income source, that would have to be more progressive as well. Maybe still 20% to $300k, but then then 25 and then 30 on super high dividend earners. Maybe up to one million and over a million.

That, plus some modest capital gains increases make large investors think about whether their money is more productive just sitting around or actively involved in transactions/trades or extensions of venture capital.

[clarice]

8. At what income level would you impose an 80% tax? nt

[eridani]

13. I see that we have another poster who doesn't get the concept of MARGINAL--

--tax rates. Specifics about the levels where 80% kicks in would depend on specific legislative proposals, but I'm guessing $500K-$1 mil. Anything up to that amount would have lower rates.

[clarice]

11. Waiting.nt

[clarice]

12. Still waiting. nt