Skip to comments.Why 70% Tax Rates Won't Work
Posted on 06/16/2011 5:13:30 AM PDT by WOBBLY BOB
The intelligentsia of the Democratic Party is growing increasingly enthusiastic about raising the highest federal income tax rates to 70% or more. Former Labor Secretary Robert Reich took the lead in February, proposing on his blog "a 70 percent marginal tax rate on the rich." After all, he noted, "between the late 1940s and 1980 America's highest marginal rate averaged above 70 percent. Under Republican President Dwight Eisenhower it was 91 percent. Not until the 1980s did Ronald Reagan slash it to 28 percent."
(Excerpt) Read more at online.wsj.com ...
Dear Bob, high rates are going to come up short on total revenue. You should know a lot about coming up short.
(I would love to get a copy of the tax instructions from the 1950s or 1960s.)
Union scum want people to stop paying their mortages, in an efffort to banrupt the system.
I say, let’s stop paying taxes and let’s bankrupt the corrupt governments.
The industrialists in America will have to close their doors, or leave.
Not good. It’s worse than not good... it is institutionalized theft and patently seditious.
no matter the tax rate, revenue will not exceed 20% GDP.
I saw some House progressives on MSNBC Cenk Uygur show calling on Obama to campaign for a massive federal public works program that hires, get this, 3-4 million new federal employees. My favorite part (why I watch it) was the rationale, here it is with my comments:
1) A massive federal public works program would get the economy moving by putting money back in people's pockets and get them spending again creating demand creating more jobs
(does the buggy really pull the horse?)
2) A massive federal public works program would cut the deficit because those people would pay more taxes than they do getting unemployment compensation and other welfare programs.
(Riddle : If the IRS makes 30 cents on every dollar the government spends on government salary and benefits how many goverment workers do we need to balance the budget?)
Ya think that would work ?? LOL
I think there should be a flat federal tax rate for EVERYONE - including those living on the cash they take from us in the form of welfare - and there should be no exemptions or loop-holes of any kind. The tax should be a deduction of pay eliminating the need for filing a return. Think of the money this country could save by eliminating or greatly reducing the IRS. The only problem I see is how would we know if business owners were being honest.
Can you imagine the economic destruction if they eliminated deductions and raised the rate to 70% for high earners?
First off, it wouldn’t hurt the wealthy. They already have their millions. It would simply stop nearly everyone else from joining the ranks of the rich. Unless you’re a popular Hollywood actress or sports star, your odds of ever amassing a fortune would be slim. Work 16 hours a day to build a small business? Not worth it.
Secondly, anyone with a high income would have very little incentive to work harder past a certain amount. Even at the current rates, people have a disincentive to work. For example, unless the spouse of a high earner also makes a substantial salary, they often end up working for little real gain.
Just to name a few.
But it sure makes liberals feel good and makes the moochers vote for the looters.
not a problem if ya give em all a gubmint motors car and CC and also tax the gas they buy another $5/gal...
Union scum want people to stop paying their mortages, in an efffort to banrupt the system.
Interesting. So the union thugs want more cash and benefits while also threatening to stop paying for their own housing which they expect to keep in an economic crash.
Sure that is going to happen.(sigh)
I have a better idea. Bankrupt the union thugs and then kick their sorry evicted asses to the curb when they default on the homes they intended to steal.
I used to care about jobs being outsourced because I'm in IT and no one except IT people cared when our well compensated gigs went overseas. For a generation now, union thugs wanted me to care about preserving their well compensated gigs so I can understand it. But while I was watching IT departments get downsized and having to sit through endless early morning or late evening conference calls to synchronize with teams in India, I'm not calling for the destruction of my home and my neighbor's home. I'm not demanding that the country be taken over by godless Marxists and Progressives who want to see me dead and have a thousand plans in the works to achieve that goal.
Its time to introduce the union thugs to reality. Crush the factory rats by sending the gigs to Latin America and hope the illegal aliens go home to work there. I'll work overtime if necessary to develop a K-12 education system that can be fully administered and facilitated on networked computers to eliminate as many union teaching jobs as can be achieved. Law Enforcement is now completely a complementary component of the criminal gangs, existing only to collect tax revenue for our overlords while simultaneously beating down and subduing the general population to foster a safer work environment for the rapists, murderers, junkies and robbers. Advocating strong 2nd Amendment legislation and providing the vigilante the same legal defense that LEOs get when they commit serial senseless murder ought to thin out the feral criminal culture while greatly diminishing the need for the government's union thug gangs.
Now excuse me while I cook up some ideas on how to decimate the SEIU and public sector union gigs.
THE PUBLIC DOLE/WELFARE CREEPS, STILL WILL NOT HAVE TO PAY ANYTHING. What are they going to pay with?
I am more in favor of the Fair Tax/consumer tax on everything except Homes. With this tax/EVERONE DOES PAY.
Now the other problem, where do they set the Percentage Rate, and where does it stop, how high will it go.
No matter what system we use, OUR GOVERNMENT will never have enough, and that's just a FACT. They may entice you to a new system with a say 20% rate, once it's in, the sky is the limit. Nothing is going to work or stop the CASH HOGS IN WASHINGTON.
We will not get another system until CONGRESS has figured out how they will not have to participate personally, it will be in the fine print, you can bet on it.
As with other bills they have passed and say: Look what we gave you. Yippeeeeee finally, UNTIL, UNTIL a little down the road do we really see what they exempted for themselves. TOO LATE.
Now we get another Congress, and they correct the last bad bill, only to insert their own set of exemptions, ON and On it goes, they are just CORRUPT to the bone and it will never be any differant.
Our Conservative Congress are as responsible as any other, as with most bad bills, they don't have to take the blame. They know we will blame the Democrats, (and the D's don't care), but the R's are eager to get their own little cut and tell us "Well, I voted against it", good little boy and for that we will re-elect you. B.S.
The Republicans don't want to be in charge, for they would have to be held accountable. Until the Republicans get in there and SLASH AND CUT as we want them to, they are no differant than a Democrat Lite.
Let’s just have all the rich pay the same rate as Barry and Meshell
Last year it was 26%
Seems that's their goal. Anyone making enough to get taxed at 70% can decide not to make anything for a while - and pay 0 taxes. Suicide by taxpayer?
“First off, it wouldnt hurt the wealthy. They already have their millions. It would simply stop nearly everyone else from joining the ranks of the rich.”
Exactly on point, and it took several posts for the primary counterpoint to Reich’s be brought up: “rich” should only be defined as ownership of assets, especially income-producing assets, and more particularly net worth. (Assets minus liabilities). Income is, in a way, just a snapshot in time of a productive person’s life. Reich proposes to grab 70% of it.
I will be disgusted, but not surprised, when the government proposes a "one time" net asset tax to reduce the debt "once and for all", and if this occurs, I would further look for it to be requested every few years.
You nailed it. Rich people realize they have literally hundreds of countries from which they can purchase government services. Right now, the USA has some of the world's highest levels of personal and corporate taxation when compared to other countries. Why pay extra when you don't need to?
I know... although I didn’t specifically refer to it in my first paragraph.
No one ever really paid that. It was riddled with shelters and loopholes and bogus write-offs. Just another way for Government to dictate to wealthy people how to invest.
You raise a very good point. Michael Medved was covering some statistics on his show the other day. The overall tax burden on Americans has remained remarkably steady over the past 20 yrs. For every Federal tax cut we got, some state or local government decided to raise taxes (often to make up for some Federal subsidy they were no longer getting). Your only option then becomes to move to a deep Red state and fight like hell to keep the locals from raising your taxes (which pretty much explains why next year’s electoral map will look the way it does).
“There are a variety of reasons you can’t tax a rich guy:
* who owns the government - the rich or the poor?
* they will just pass the cost along
* they will not work as hard
* they will use lawyers and accountants to minimize taxes
* they will “cheat”
* most didn’t get rich by being stupid (unless they inherited it)
Just to name a few.”
Yours is a good list. Thank you. Here’s one, though, that almost no one ever points out, but I think is among the most empirically relevant ...
* Wealth and income are rather easily hidden for a time. Investors have great discretion over the timing of their tax burden. They “come up for air” only when tax rates fall.
I can invest in stocks that pay low dividends. I can buy art. I can re-invest in my small business, lowering this year’s tax liability but increasing future profits. And I can wait until these buttheads are out of office, liquidate my assets, and keep the fruits of my labors.
This sort of strategy makes things look worse today than they truly are, and confounds the efforts of those who would like to expropriate my hard won earnings.
I believe that America is a resilient nation, and our ability to work around government stupidity is ever greater. In the Dust Bowl days farmers had to sit around and watch their empty fields. Today the options to re-route time and treasure are manifold. That’s what these yahoos don’t understand.
When we come out of this nightmare, the 5% growth that a few people are aspiring for will be a lower bound! But we need to vote these folks out of office first.
Oh boy! 70% income tax rate! That’ll getter done, hey? Oh, and they consider “wealthy” to mean making over $250,000 AGI per couple. Keep in mind that in 1952, “wealthy” was making over $15,000 annually, which was managed by only 500,000 out of 41,000,000 families. How many years will it be before $250,000 in the future looks like $15,000 today?
[sarcasm on]They should argue that although Big Government is obscenely expensive and wasteful, we need it to save the world. Like the Manhattan Project, we should "invest" in a massive, expedited "green energy" program that would "change the world" in 3 years.[sarcasm off]
(I am not trying to hijack this thread. In fact, "carbon credits" are just as destructive as direct taxes or other govt. mischief, and "green jobs" includes massive govt. hiring.)
I think that eventually, alternative energy R&D will produce something useful, and government can play a part. But not by making "energy costs skyrocket," setting up Wall Street to levy private taxes on us via "energy credits," or giving "stimulus" money out as political payoffs.
But they are telling unemployed Americans that their programs will produce jobs now, and it's not working, for the reason you laid out clearly above.
They are already claiming that the economy is getting better. If the private sector has legitimately begun to heal itself, in spite of the government, before Nov. 2012, they will claim credit, and they will get more votes.
But what if Romney beats Obama? Would the insanity really stop? Romney confessed he believes in "man made global warming" but I don't think CNN asked that question at the GOP debate. (If Obama loses, at least they have a "moderate" in the WH.) Romney says he won't do "energy credits" unless other countries do it too. Oh, such a promise from a flip-flopper makes me feel so much better! I'm sure he will rein in the EPA too, right?
Romney would just be “Obama-Lite”
One would hope that Romney would appoint better people to the SCOTUS, but who knows. In that respect, we don’t have anything to lose by voting for Romney in the general, if it comes to that.
But as you know, having a RINO in the WH can be worse than a Dem, (e. g. GWB came close to foisting amnesty on us, because of GOP senators jumping on GWB’s amnesty bandwagon — Obama failed completely).
The far left will do anything to try to increase the size and dependence on big government. So what they propose here is certainly no surprise.
” But as you know, having a RINO in the WH can be worse than a Dem, (e. g. GWB came close to foisting amnesty on us, because of GOP senators jumping on GWBs amnesty bandwagon Obama failed completely). “
You nailed it. I’ll tell you right now that I have a litmus test for my vote. The candidate has to have a history of being 100% against any form of amnesty. It doesn’t matter to me if the country is destroyed by a Marxist, or a Republican.
Trying to keep track of Romney's flips on amnesty gives me a headache (especially since the Media is not interested in asking him about it). At first he supported the Bush/McCain/Kennedy amnesty, but some time in 2007, as the GOP primaries appeared on the horizon, he decided he was against amnesty. Then in 2009 "Romney believes that one way to attract more minorities to the GOP is to pass immigration reform before the next election, saying the issue becomes demagogued by both parties on the campaign trail."
And I think you all know about his other flip flops.
Anybody have a comprehensive list of Romney's immigration positions with dates?
But back then they could deduct EVERYTHING in sight, now you can’t.
Romney is on whatever side he is speaking to on a given day