What is wrong with it is that it interferes with capital formation and is a drag on the economy, and, like all tax increases encourages the growth of government, both in absolute terms (making it more tyrannous) and in proportion to the economy (which is also, per se, a drag on economic activity).
There is one way of raising taxes on the wealthy that does not create a drag on capital formation: to place limits on the exclusion of income from taxation. Calvin Coolidge (hardly a raging leftist, in fact one of the first Presidents to support tax-cuts which spurred economic growth) opposed the tax exemption for municipal bonds because it allowed the wealthy to avoid paying taxes.
Now, every tax exemption, deduction, and credit was put in place to encourage some socially useful end. While cleaning up the tax code is, in the long run, very desirable, in the short-run every change to abolish a deduction or credit or to make now tax-exempt income taxable will meet stiff resistance. I would therefore propose the following: first abolish the AMT (it was a horrid kludge trying to get at what the rest of my proposal does more simply), then set a maximum amount of income that can be excluded form taxation by any means other than charitable contributions (which would still be allowed to exclude any amount from taxation — otherwise the statists’dream of all of civil society having to pass through the government would be brought one step closer by withering private philanthropy).
As a ball-park figure I propose $250,000 for individuals, $500,000 for married couples filing jointly, and $100,000 for persons who can be claimed as dependents. One would complete one’s taxes the usual way, then add up all the deductions (other than charitable contributions), all tax exempt income, and the amount of all tax credits divided by one’s top marginal rate.
If the total is more than the cut-off, the excess gets added to income before figuring the tax.
It’s a heckuva lot easier than the AMT forms, and actually gets the rich to pay more taxes.
Now, why does this not have the baleful effect on capital formation that raising the top marginal rate has? Because it encourages the rich to pursue income generation, rather than tax avoidance, thereby pushing capital formation in the private sector, while raising marginal rates does just the opposite.
It still has the downside from the POV of shrinking government of providing more money to the Federal government, but it’s something to consider throwing into the mix as an inducement to actual cuts, rather than decreases in the rate of increase like the “deal” is giving us.
the most wealthy?
that’d start around $50m/yr
the $250k/yr number is to keep the upper middle class from breaking out
either way, why the hell should a person pay more, yet consume less? how does that make sense?
Some time ago (1986 ?) the working Joe lost a whole bunch of deductions, started paying more FICA (uncapped) and at some time later (Clinton ?) retirees started paying income tax on their social security. Medicare tax however was still capped.
Given the above I’d not object to Medicare tax being uncapped like Soc Sec. Also I believe unemployment checks should not be subject to income tax either, that’s just idiotic.
Still, it’s always the middle income people who get screwed when taxation rears its head.
I know, and it is going to shock the hell out of all you greedy, self-righteous, evil socialist pigs.
Why would anyone tithe to charity, what the government takes by force?
As some one already pointed out so succinctly "it's not the governments money" and it's not your money.
I think the rich get away with every scam, every loophole, every little trick in the book....BUT...there will never be increased taxes on the rich.....it always falls back on the middle class/working class...someway, somehow, we lose....
Because there is no such thing as a ‘reasonable’ amount for taxing the rich for the Socialists. The more they take, the more they want. They are drug addicts that can never get enough of other people’s money.
Please don’t ask stupid questions like this any more.
Do you seriously believe that if Liberals were handed more money, that suddenly they would spend less?
. First, perhaps, you should explain why it would be "right".
Because the rich can "afford it"? What if they have better ways to use the money? And why do you get to make that decision?
Because the government "deserves it"? Whatever has government done to cause you to think this?
Because the rich should be "punished"? How would that "help" anybody?
[ but what is so wrong about raising taxes to some negotiated extent on the most wealthy taxpayers in the US? ]
Because the “rich” already pay most of Americas income taxs..
Taxing them more would not be “fair”... already its not fair..
Almost 50% of Americans pay Zero taxes....
There is also the fact America is taxed too much by the federal government..
You do know America has THREE governments don’t you...
Federal, State and Local governments.. they are separate governments.. and ALL TAX...
Most people when saying government they mean federal government..
But America would run just fine with NO federal government.. maybe better..
The States operate fine within their borders..
Each State sends $100 (to find a figure) to the federal government and the feds send $10 back to them if they are lucky..
The federal government wastes most of the money thats sent to them..
The federal government is a black hole for revenue(money)..
send it to them.. and it mysteriously vanishes..
I would say you know little about civics.. pity..
Well..broke 100 replies on a vanity post that resulted in about 75% personal attacks with the remainder consisting of some very thoughtful and courteous replies. I do hope that my intentionally provocative post had the benefit of emphasizing taxation inequities and the need for revenue reform along with a big reduction in governmental spending. BTW, I am perfectly aware of the fact that 48% of Americans who do not pay taxes should and that the shopworn notion of “my (immoral) hand in your pocket” is not a matter of raising taxes on the rich, rather it is a reality that has been with us since the institution of a progressive income tax in the US
What, not fair you say? Then why do we have a progressive tax where the rich get robbed of their hard work while half the country doesn't pay taxes but get to vote? Now that's not fair!
Actually there’s an even more clear reason for why the idea of ‘tax the rich’ is inane- it won’t work.
Tax hikes on upper earners never raise nearly as much revenue as projected. This is because rich people generally aren’t dumb. Even if they do happen to be dumb (maybe some athletes or actors), they generally hire people who aren’t dumb.
When you make the big moolah, it is well worth your time to avoid taxes. This is why we have tax lawyers who specialize in reducing tax burdens and make big bucks doing so. As others have mentioned in the thread the process of the rich avoiding taxes generally leads to misallocation of capital and you end up with less growth. Hence you end up with revenue shortfalls for two reaons.
Thomas Sowell covered this pretty clearly:
Two reasons why we should not tax the rich. First, it will tank the economy. Taking capital out of the free market means less investment dollars that create jobs. This is basic economics. Second, the insatiable appetite of the government will demand more, and the income of the middle class will be next.
The top 1% earn 20% of the nation’s income yet pay 40% of the income taxes. Their taxes should be cut in half.
Also, how many people are hired by the poor?
I’m with you. We need more money or those mosques we’re rebuilding in Turkey and other mid-eastern countries won’t get built and those countries won’t like us anymore. /s
Taxing the rich? You can’t tax wealth, ie inheritance. And if you tax the so called rich, you hit businesses. Business will leave the country, as your so called rich pay most of the tax now!! Further, ev4en if you taxed ALL the so called rich in the entire country 100%, it would not pay the budget for one year.
Taxing job creators is just making the job situation even worse. You do understand that what a person/or business “makes” is not what they take home don’t you? Most small businesses are lucky if, as the owner, they can support the families on what is left after payroll, taxes, regulations, healthcare for the employees, SS for their employees, WC for the employees, AND get supplies to continue making whatever they produce? Just to name some of their expenses. Tax them, you put people out of work. Large companies have much more overhead, tax them, they leave the US.
How do you maintain the life style of someone who has his taxes raised? He asks for more money. Matt Damon asks for an extra million dollars per picture. The studio just raise the ticket price. How does a NBA star get his Lamborgine? All taxes end with the consumer. It just makes everything we produce and consume more expensive.
No job should be more than $250,000 taxed at 50%, sliding 2% for each $2000 to $50,000. I would be able to afford to go to a NFL game now and then.
To whom does the money belong? And how much of someone else’s money do you think you have a right to take just because you think they have more than they should? What you are promoting is nothing more than institutionalized coveting. I seem to remember a commandment that condemns that.
You showed your socialism when you said you didn’t give a fig that 5% pays 80%. Not only is that completely moronic, you clearly have no clue of the statistic you are citing.
I can guarantee, now before you try and look it up to reply, that you don’t know at what taxable income level the top 1%, 5% or 10% is.
And it’s the top 10% pay about 78% of all federal income taxes. You couldn’t even research it enough to know that but you sure were quick to flout it.
It’s the spending stupid.