AHC/PC/WI: US Tax Rate For Rich Remains Around 90%

Vahktang

Donor
Why fund when 90% goes to the government?
Because you still get 10%. If you mak a meg and keep 100k, that is still 100k more than you had before.
And, sure you can go to another country to escape taxes. But then you are not home, you are a foreigner.

Finally, all that money has to go somewhere. No 'Reagan memorial national debt', no need to borrow.
A lot of that money is going to go to education. Real cheap state colleges, free (?) Community colleges, wirh decently paid teachers, good supplies and infrastructures.
Cheap college would probably mean a better educated general populace. Which may lead to lower birth rates and possibly greater liberalism.
Hopefully lead to a decrease in the American bias against the intelligentsia.
Universal health care coverage?
A pool of educated, professional workers? Who will innovate and expand technology.
Easy immigration to offset tje lower birthrate and take the jobs that don't require much education?
 
800px-Historical_Mariginal_Tax_Rate_for_Highest_and_Lowest_Income_Earners.jpg


Lowest Tax Rate is at 20.0% were the hell will people live.

Reference
https://en.wikipedia.org/wiki/Income_tax_in_the_United_States
 

Ian_W

Banned
I am talking about personal people and I am assuming it applies to capital gains. Why would I make the first investment into a start up that is highly probable to fail when 90% of my profit, if it works is taxed? Risk/reward - 90% tax rate eliminates the reward part.

What you do is make that investment from within the retained profits held by your corporation, as opposed to disbursing it to the owners for them to waste on fancy yachts and renting Seantors.
 
So is the answer to have more tax brackets for people earning higher amounts? Personally I don't see why not, they cannot all leave the country, especially if their company, their earnings are based there.
 
What exactly is the question here:

(1) Suppose we had the Eisenhower-era 91% top rate combined with the Eisenhower-era deductions, "loopholes" etc.?

Or is it

(2) Suppose we had today's income tax structure *except* that the top rate is 91%.

Those two scenarios give you quite different results. As I noted at https://www.alternatehistory.com/discussion/showpost.php?p=11374935&postcount=14 with (1) the personal income tax is hardly more progressive than it is today, because very few of even the richest prople actually paid the 91% rate.
 
The only thing the 90% rate was good for was RE-impoverishing the poor and taking away virtually all the winnings of members of the middle-class when they suddenly won a sweepstakes or game show (especially a game show "Championship").

They weren't set up with the accountants and tax lawyers enjoyed by the rich, and the IRS and state income revenue services seemed to have an almost Snidely Whiplash glee at taking away the $$$ of people who had thought that all their life long financial problems had been vanquished. But as one former IRS auditor said of this phenomenon, "Little People, Little Problems. Big People, Big Problems."
 
What exactly is the question here:

(1) Suppose we had the Eisenhower-era 91% top rate combined with the Eisenhower-era deductions, "loopholes" etc.?

Or is it

(2) Suppose we had today's income tax structure *except* that the top rate is 91%.

Those two scenarios give you quite different results. As I noted at https://www.alternatehistory.com/discussion/showpost.php?p=11374935&postcount=14 with (1) the personal income tax is hardly more progressive than it is today, because very few of even the richest prople actually paid the 91% rate.

What if number two was the case?
 

Ian_W

Banned
The only thing the 90% rate was good for was RE-impoverishing the poor and taking away virtually all the winnings of members of the middle-class when they suddenly won a sweepstakes or game show (especially a game show "Championship").

They weren't set up with the accountants and tax lawyers enjoyed by the rich, and the IRS and state income revenue services seemed to have an almost Snidely Whiplash glee at taking away the $$$ of people who had thought that all their life long financial problems had been vanquished. But as one former IRS auditor said of this phenomenon, "Little People, Little Problems. Big People, Big Problems."

Not quite.

What it did was made sure that the income of the rich got used to continue socially productive things, like ensuring municipalities could build roads and sewers (aka tax free Munis), and making sure American business kept investing (aka unrealised capital gains).

Instead, you got a whole bunch of yachts, parties, rented Senators and so on.
 
Is that a problem with the taxes or with the minimum wage? :)

that just federal tax rates

you still have state and local tax social security Et Cetera

its more like 30% so it is a taxes problem
I would have no phone TV car internet Et Cetera in this world with not my car no job at all so I would be Homelessness:rolleyes:
 
It's hard to say what effect raising the top tax rates would have because there are so many variables. Real wages in the U.S. increased steadily between 1945 and 1972, but then stalled through the stagflation era and remained flat throughout the 1980s, despite the economic recovery. In the postwar era, the middle classes thrived in North America, Western Europe, North America, Japan, Australia and New Zealand. This lasted until 1973 when the rise of oil sent western economies into a tailspin. Needless to say the working class and lower middle class in the U.S. has had a difficult time for a while.

During the 1970s and into the 1980s, high paying blue collar jobs began to disappear. Japan and to a lesser extent West Germany were the threat back then and in the 1980s imported goods from Hong Kong, Taiwan and South Korea also made their appearance in the U.S. Surprising to many today was that China accounted for less than 1% of U.S. trade in 1985. Even Mexico only ranked in fifth place as a source of U.S. goods. Once NAFTA came about, many U.S. companies established plants in Mexico, taking advantage of the cheaper labour.

In the U.S. the auto industry was particularly hard hit with imports enjoying a 15% market share between 1970 and 1973, suddenly jumping to 27% in 1980 and 31% by 1987. The Japanese brands became popular in the compact and sub-compact market whilst West German luxury brands outsold Cadillac and Lincoln. In electronics, the Japanese brands like Sony, Mitsubishi, Sanyo, Panasonic etc became ubiquitous in American households, with Zenith, RCA, Magnavox, Philco and others either disappearing or being acquired by foreign multinationals.

As trade became freer, many goods did become cheaper for Americans. One has only to look at the prices of electronics, household appliances or clothing to see that there is much more choice available today at lower prices (adjusted for inflation) than in 1970. However, the cost of healthcare, college and housing in many cities (San Francisco, New York, etc) has risen far beyond inflation. However, the astronomical cost of housing in select markets also applies to Canada, Australia, the UK, New Zealand and parts of Europe as well.
 
What you do is make that investment from within the retained profits held by your corporation, as opposed to disbursing it to the owners for them to waste on fancy yachts and renting Seantors.

There are a lot of ways to evaluate this. You can compare and contrast investment spend by private individuals versus corporations - the type of investments, locations, motivations, timing etc. I am fairly certain individuals have a "home bias" to their investment spend whereas corporations will go anywhere. Corporations are heavily influenced by stakeholders such as their customers, investor base, and employees while individuals have a different set of motivations.

You can also look at it from the perspective how corporations use their capital - investment, dividends, and share buybacks. What is the appropriate rate of investment spend? Do corporations payout too much to shareholders? Are they too risk averse with their investment spend?

Finally, with Citizens United and your proposed 90% tax, you can ask whether the differences between corporate spend and wealthy individual spend will be meaningfully different.

And there are probably a whole number of additional questions that relate here, which if you devoted serious time to could earn you a PhD. But instead you went for the one-liner about yachts and senators. Congrats, you are qualified to participate in a Presidential debate.
 
What you do is make that investment from within the retained profits held by your corporation, as opposed to disbursing it to the owners for them to waste on fancy yachts and renting Seantors.

The main problem is, America's 1950s/60s boom was largely tied to the fact that Eurasia was recovering from WW2 and needed American exports. Also, 1950s was extremely corrupt (Operation Ajax and Guatemala coups happened in Eisenhower era largely at the prodding of corporations like United Fruit in the latter case, not to mention the Mafia and Jim Crow).
 
A while ago our Treasurer said something to the effect that as much fun as it is to tax the rich there aren't enough of them to fix the country's finances.

This is most likely true, however it does engender a bit of an attitude that it isn't worthwhile taxing the rich so just let them go. Bugger that!
 
American billionaires become Canadian, and tax revenues from the rich plummet.

It's marginally more difficult than in the Eurozone, but you can draw inference from Hollande's tax hike.

So they continue to make money from the businesses they own in the USA, but pay Canadian taxes on the income that these businesses provide them?

Why not just tax the things people own that make them money, and forget about taxing individuals entirely?
 
American billionaires become Canadian, and tax revenues from the rich plummet.

It's marginally more difficult than in the Eurozone, but you can draw inference from Hollande's tax hike.

I actually subscribe to the thesis that this risk is overrated. But if they are not moving they are probably not working either. Either way there's no tax revenue.
 

TinyTartar

Banned
When you have Lefties like John Lennon protesting tax rates (Taxman song), you know that they are excessive.

I don't think we are ever going back to that early to mid Cold War ta rate.

For one thing, you could fly a 747 through some of the Eisenhower era loopholes. And there is a reason that the crazy high rate went down over time. It comes down to supply and demand.
 
I actually subscribe to the thesis that this risk is overrated.

I don't know - London is now allegedly the fourth largest French city in the world because so many have moved there to avoid the taxes in France. That's a hell of a lot of money going to London instead of Paris every year (before you even start to consider the money going to Brussels, Madrid, Bern etc).

Most people don't mind paying some tax but if you start taking the piss out of them and they're loaded then there's very little to stop them from either moving somewhere that doesn't take the piss or paying clever accountants to stop the government accountants from taking it all.
 
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