Cuāuhtemōc
Banned
I am aware that several decades ago, the top 1% paid an incredibly high percentage in taxes so I ask, how to keep it that high?
As much as I'd like to see rich people get the stuffing taxed out of them, I think that taxes that high would discourage people from trying their best to make it in the world, knowing that in the end, the state will end up reaping the biggest reward. I mean, if a million dollars a year gets taxed 90%, then you might as well only make 200k a year and get taxed 50% (or whatever it would be).
It's also important to distinguish between tax brackets and effective tax rates. Tax accountancy wasn't invented in 1980, after all.
Just to give an example, in 1979, when the top bracket was 70%, the effective rate of taxation on the top 1% was about 37%.
It's quite possible that the only PoD you need is for Reaganism to not get into office, and you've got a top rate in the 70% range today.
Kiat,
That 90 percent rate is only on income earned over $1 million, not on all taxable income.
What miccal99 said.
It's also important to distinguish between tax brackets and effective tax rates. Tax accountancy wasn't invented in 1980, after all.
Just to give an example, in 1979, when the top bracket was 70%, the effective rate of taxation on the top 1% was about 37%.
Plus, it acts to discourage organizations from paying individuals -- like, say, their board of directors -- money that could go into the company, or create perverse incentives to run it into the ground to grab a quick buck.
The key points to taxing the rich more are twofold; First, there is the argument that since they have gotten so much more out of the economic system they exist in, they owe more back to maintain that system. They would not be millionaires if there weren't many more workers and clerks to support them. Second, there is the argument that they do not need all that money to fill their basic requirements, a millionaire can afford to lose half his wealth far better than someone pulling in a low five figures. This seems less persuasive to me, but it is factually true.
And you can devote said money into programs to help those who can't help it that they're not rich and have a hedge fund.