Let's debate merits of 90% top marginal tax rate

harry truman show wrote:

Not John Utah (Thanks God!) wrote:

Seems like they set the top marginal tax rate to 70% or higher from 1936 through 1980.

If I remember correctly US GDP grew at a higher rate during those years than it has since then. And shockingly, they did not even have to shoot their own citizens to achieve these results.

I assume you would also support greatly increasing taxes on the poor and middle class? the tax rates on the poorest were much higher then also. I would also assume on a large increase in the number of loopholes for the rich as well? There were much more deductions available for the highest earners then compared to now. The top earners in the 50s and 60s paid EFFECTIVELY the same tax rate as they do today.

Well, you know what they say about assuming, right? It makes an ass of you (but not me).

I never said I support any particular tax policy. I simply pointed out the monumental idiocy of John Utah's post. Hence your use of the word, "also", is also moronic. Great job - three of your first five words were inappropriate (or worse)!

But thank you for playing nonetheless.

ya..... wrote:

My question is: what problem is making the marginal tax rate 50%, 60%, 90% etc trying to solve?

Several problems.

First, it's a better way to raise revenue without lowering the quality of life of the average American. The top 1% of Americans own 40% of the wealth. Taxing the poor isn't an effective way to raise revenue.

Second, inequality in America is a problem because of the nature of our political system. If money = speech, then having more money gives you a bigger voice in our society. I don't care if my neighbor has a nice car or a nice house, but I do care if my neighbor and I have an argument that he'll be more likely to get what he wants because he has more money. I do care that a very small number of wealthy people have outsized impacts on our elections.

How do they impact the elections? Doesn’t every vote count the same?

What makes you think they work less hard?

What do they do with all that money? I see the following options and outcomes:

1) They stick it in a mattress. Okay, that is not really going to help anything and no one (of any note) is doing that.

2) They buy stuff. Well everything they buy was built or created by someone. They buy a nice house. How many people had jobs because of that house being built? They buy appliances for the house. Again jobs. They pay for landscaping. Again jobs. People invest in the companies that produced those items and get stock dividends or can sell the stocks more a profit. Maybe the doc hires a nanny.

3) They put the money in the bank in a simple savings account. (Not a great investment, but still some money will be in there). That money is used for loans for others to buy cars, houses or start or expand a business. Plus the people who work at the bank are getting paid.

4) They invest either in stocks, mutual funds or IRAs. See above for where that money goes as well.

Oh and that MD whose practice is making more money will likely hire more staff to meet the needs.

Also, taxes change behaviors. I do not really buy the idea that once someone reaches whatever the plateau is that they will stop working at least not on a large scale. I do know of one instance where someone I know was offered a contract job and realized that if she took it, her net would not be all that much (it bumped that money into the higher rate) and decided that it was not worth it; she preferred to vacation with her family (opportunity costs, after all).

Not John Utah (Thanks God!) wrote:

John Utah wrote:

Seems like they've done some pretty large experiments with communism.

If I remember correctly they had to shoot their own citizens to keep them from leaving and the entire system collapsed.

Seems like they set the top marginal tax rate to 70% or higher from 1936 through 1980.

If I remember correctly US GDP grew at a higher rate during those years than it has since then. And shockingly, they did not even have to shoot their own citizens to achieve these results.

At one point the top marginal tax rate was 90% and something like 8 people actually paid it.

There were also a gazillion deductions.

Democrats are selfish wrote:

If all of the wealthy democrats would just donate 90%, the country's problems would be solved. It's interesting how Buffet, Gates, and Bezos keep most of their money in order to earn even more. Wealthy actors, athletes, and musicians spend all of their money on houses, jewelry, and cars.

Democrats/Blue States already fund the rest of the country. It's all take-take-take in Trumpland.

Democrats are selfish wrote:

If all of the wealthy democrats would just donate 90%, the country's problems would be solved. It's interesting how Buffet, Gates, and Bezos keep most of their money in order to earn even more. Wealthy actors, athletes, and musicians spend all of their money on houses, jewelry, and cars.

Actually that sort of donation would not get us far. Here are some old numbers, but it gives an idea of the magnitude of spending if we taxed all money earned (in this case it looks like salary) at 100% over $1M.

Best states are low tax run by Republicans. Worst are high tax run by democrats.

Not gonna do it, wouldn't be prudent wrote:

Let's assume that we are all on the same page that things like healthcare, college and other items in the green new deal should be provided to all people. Even if you're not hold on...

Just look at the numbers, if you tax people over $10m in salary, you would accumulate an additional $1T a year at most assuming there weren't loop holes for people to work around. Her plan is $42T in total (over a decade), so you can see there's a gap there.

Her plan will double the federal spending and put our current defect at 24-28% of GDP when it is currently below 4%. These numbers don't work out...and she needs a better plan than "just fund it".

Glad she wants to boil the ocean, but that never seems to work out for anyone.

Where do you get that taxing over $10M would bring in $1T a year?

One foundation ran the numbers of the marginal rate at 70% for all income and (assuming no changes in behavior) figured you get $300B over 10 years.

does that include an algorithm for tax avoidance that such a bracket would certainly cause? [eg deferring/recategorizing income]

David S wrote:

ya..... wrote:

My question is: what problem is making the marginal tax rate 50%, 60%, 90% etc trying to solve?

Several problems.

First, it's a better way to raise revenue without lowering the quality of life of the average American. The top 1% of Americans own 40% of the wealth. Taxing the poor isn't an effective way to raise revenue.

Second, inequality in America is a problem because of the nature of our political system. If money = speech, then having more money gives you a bigger voice in our society. I don't care if my neighbor has a nice car or a nice house, but I do care if my neighbor and I have an argument that he'll be more likely to get what he wants because he has more money. I do care that a very small number of wealthy people have outsized impacts on our elections.

If the US wants a Nordic type welfare system the only way to pay for it is to have those high tax rates (I think Denmark is 55%) start at around $60K per year. Taxing the top 1% will not get you there--they already are paying something around 35% of all tax revenues as is.

I think you over estimate the influence that money has in electing people.

I see a lot of jealousy and zero-sum game thinking when it comes to economics. I see people wanting to tax the wealthy not to fund programs but to punish them in some way. Few rich people are evil. Most work their arses off to get there. For every evil rich SOB there are hundreds of more who are doing right by themselves and others.

Not gonna do it, wouldn't be prudent wrote:

Let's assume that we are all on the same page that things like healthcare, college and other items in the green new deal should be provided to all people. Even if you're not hold on...

Just look at the numbers, if you tax people over $10m in salary, you would accumulate an additional $1T a year at most assuming there weren't loop holes for people to work around. Her plan is $42T in total (over a decade), so you can see there's a gap there.

Her plan will double the federal spending and put our current defect at 24-28% of GDP when it is currently below 4%. These numbers don't work out...and she needs a better plan than "just fund it".

Glad she wants to boil the ocean, but that never seems to work out for anyone.

It is not at all obvious that there is a gap there. The US currently spends $3.3 trillion annually on health care. Over the coming decade this is expected to grow if we stay on the current course so that we will spend roughly the entire $42T that you refer to over the coming decade on health care alone!

The single largest item in her "new deal" is NOT a huge cost sink for us but rather a huge cost savings for us. The savings from single payer health care, similar to what other advanced nations have, would probably pay for everything else on her list by itself.

sit and kick wrote:

does that include an algorithm for tax avoidance that such a bracket would certainly cause? [eg deferring/recategorizing income]

I put in my comment "with no change in behavior". The article, if you take a few minutes to read it, also offers a dynamic scoring.

Luv2Run wrote:

Not John Utah (Thanks God!) wrote:

Seems like they set the top marginal tax rate to 70% or higher from 1936 through 1980.

If I remember correctly US GDP grew at a higher rate during those years than it has since then. And shockingly, they did not even have to shoot their own citizens to achieve these results.

At one point the top marginal tax rate was 90% and something like 8 people actually paid it.

There were also a gazillion deductions.

You probably thought that you had a point in there somewhere.

A take down of the Medicare for All plan: ttps://

You "see" what you want to see. Doesn't make it true. In fact, doesn't make it jack sh!t.

Luv2Run wrote:

PIO! wrote:

It is not at all obvious that there is a gap there. The US currently spends $3.3 trillion annually on health care. Over the coming decade this is expected to grow if we stay on the current course so that we will spend roughly the entire $42T that you refer to over the coming decade on health care alone!

The single largest item in her "new deal" is NOT a huge cost sink for us but rather a huge cost savings for us. The savings from single payer health care, similar to what other advanced nations have, would probably pay for everything else on her list by itself.

A take down of the Medicare for All plan: ttps://

www.washingtonpost.com/news/fact-checker/wp/2018/08/07/democrats-seize-on-cherry-picked-claim-that-medicare-for-all-will-save-2-trillion/?utm_term=.120a96d62cc3

The US could be spending over $4,000 less per person per year than we currently are (unless you want to simply assume that we are a particulary incompetent people).

Multiply by 326,000,000 people and the US should be able to reduce our medical costs by $1.3T per year. Unless, of course you think that we are more incompetent than all the other single-payer advanced economy nations. I prefer to think that we are fairly competent.

Cherry pick that.

PIO! wrote:

The US could be spending over $4,000 less per person per year than we currently are (unless you want to simply assume that we are a particulary incompetent people).

That be the same kind of math as when the grocery store clerk informs you that you "saved" $14.75 today - or that "saved" everyone $2,500 per year with Obamacare!