Democrats want to separate the rich, from the very rich.

[relic2279]

http://www.news-to-use.com/2009/07/taxing-very-rich.html

It looks as if House Democrats want to create a new tax bracket, for individuals earning $280,000 or more and couples earning $350,000 or more. The rate would be even higher for individuals earning at least $400,000 and higher yet for individuals earning at least $800,000. (The cutoffs for couples would be $500,000 and $1 million.)

My colleague David Herszenhorn has the details in Saturday’s paper.

Perhaps the most surprising aspect of this proposal is that it would make the tax code more similar to the way it used to be. I wrote a short essay on the history of the tax rates for The Times Magazine this spring. The bottom line:

    [Y]esterday’s tax code, unlike today’s, had separate marginal tax rates for the truly wealthy and the merely affluent. For a married couple in 1960, for example, the 38 percent tax bracket started at $20,000, which is about $145,000 in today’s terms. The top bracket of 91 percent began at $400,000, which is the equivalent of nearly $3 million now….

    Today, by contrast, the very well-off and the superwealthy are lumped together. The top bracket last year started at $357,700. Any income above that — whether it was the 400,000th dollar earned by a surgeon or the 40 millionth earned by a Wall Street titan — was taxed the same, at 35 percent. This change is especially striking, because there is so much more income at the top of the distribution now than there was in the past. Today a tax rate for the very top earners would apply to a far larger portion of the nation’s income than it would have years ago.

I have no idea whether this proposal will go anywhere. But it’s certainly not a radical one. As David Brooks, another colleague (and fellow member of Club Wagner), wrote in his column on Friday, “To get our overall fiscal house in order, we’re going to need to raise taxes on the rich.”

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I favor this idea. Even though I have no clue if something like this would pass.

Random Quote:
"Do you realize that throughout all of the 1950s - At a time of widespread prosperity in America like none before or since - the top tax bracket, on individuals making over $400,000 per year, was always more than 90%"


The US has had progressive taxation for a long time. It's only been recently that the wealthy have been asked to contribute so little for all the societal infrastructure (and benefits) they're allotted.
http://www.truthandpolitics.org/top-rates.php

Note how reductions of the top tax bracket coincided with economic crashes and increases coincided with economic recovery. Not coincidence.

[queenmetroid]

As always, I'm concerned about adding a new tax bracket simply because it could lead to more. Isn't paying taxes complicated enough? Still, they aren't asking my opinion, so whatever.

And one more thing: I'm not against penalizing the rich for being rich. It's fair to say that the rich drive the world through investing and capital. They don't always drive it where we want it to go (we've had a few recent examples of large corporations doing just that) but I'd say for the most part, the system works.

Anyway, feel free to question me on that, because I'm not really married to that view, I think there's good arguments on both sides.

[Carnivus]

So if I earn 3.000.000$ and have a 90% tax that leaves me with 300.000....but doesn't that mean that someone earning 500.000$ will have the same amount after tax income?This sounds more like communism...

[Path]

35%? The top marginal rate is 35%? Should I find that unsound, or just go YAY and move to the US? Questions, always questions...

So if I earn 3.000.000$ and have a 90% tax that leaves me with 300.000....but doesn't that mean that someone earning 500.000$ will have the same amount after tax income?This sounds more like communism...

Do you know how marginal tax rates work?

[Sosseres]

I've never understood why they use brackets instead of a simple formula where you just put in amount earned and get tax as the answer...

[Proin Drakenzol]

good. force them to put money back into the economy rather than hoping they'll "reinvest their assets." Which, demonstrably, doesn't work.

[lx4]

In general progressive taxation holds back economic growth. Something America has been able to avoid with its mass of tax exceptions, even if the tax has been progressive on paper there are so many exceptions and loopholes that those with a high income dont have to pay much more. I doubt this will be any different. 

[sdedalus83]

Yet another pointless attempt to appeal to the emotions of the masses.  The vast majority of the very wealthy earn very little through direct income.  Those who do are people like actors, athletes, the elite amongst specialized professions.  Business executives and investors make most of their money through stock options and investment returns.  There's a good reason why those types of income are taxed differently.  It ties the financial future of the individual to the success of the business.
Unfortunately, the system has been brutally abused.  Just look at the new trend toward $1 salaries and pay in options structured in a way that taxes may never be paid on that income.  So they'll be arbitrarily hiking the tax rates of a tiny minority while sidestepping the real, difficult issue entirely.  It'll please their base and won't do a damn thing for revenue.

[queenmetroid]

I agree with Sosseres on that point. Just because you make more money doesn't mean you should have to pay more. I suppose I'd be the first one to complain if the rich got a tax break and had to pick up the tab, though. And about CEOs getting paid one dollar salaries; I don't think that's always the case. A lot of CEOs are quite well paid as evidenced by recent attempts to regulate. And how do you determine someone's real worth based on stock options? That's not real money, so you can't tax it.

[Sosseres]

That wasn't what I said, I simply disagreed with the bracket system. I never said anything about a flat rate. I would prefer an exponential or similar formula.

[queenmetroid]

An exponential tax would certainly be easier than what is in place right now. Perhaps not better, but easier.

[kyanwan]

They don't learn their lesson, do they?

Maryland plan to tax millionaires backfires
Top earners disappearing as economy withers
http://www.baltimoresun.com/news/maryland/bal-md.millionaire14may14,0,5454753.story

Those with the means, will find a way - to not pay the taxes, that is.

[relic2279]

Good I say. Let them run around looking for tax havens in the US. Let the small business owners fill the hole they're leaving behind by leaving.

If it becomes national, they will have to pay to do business anywhere in the US and we allow them freedoms they can't find anywhere else. Even if we bump up the tax rates for the super rich, they still would pay less than nearly anywhere else in the world.

Hey, how about putting them all in Somalia? It's the libertarian capital of the world. 0 taxes, the free market reigns supreme. What's not to love?

[nstgc]

That wasn't what I said, I simply disagreed with the bracket system. I never said anything about a flat rate. I would prefer an exponential or similar formula.

I second that! In general I think most complicated catagorizations can be replaced with not so complicated formulas.

I still favor the new tax law.

[mgz]

i still say we sell florida back to spain to cover the deficit and build a massive fence.

Gets rid of the expense of dealing with all those hurricanes and a large quantity of illegal immigrants

[kyanwan]

Good I say. Let them run around looking for tax havens in the US. Let the small business owners fill the hole they're leaving behind by leaving.

If it becomes national, they will have to pay to do business anywhere in the US and we allow them freedoms they can't find anywhere else. Even if we bump up the tax rates for the super rich, they still would pay less than nearly anywhere else in the world.

Hey, how about putting them all in Somalia? It's the libertarian capital of the world. 0 taxes, the free market reigns supreme. What's not to love?

*COUGH*

What?  Look for tax havens in the US?

Let's look abroad -

For example, Microsoft.   Threatened with higher taxes: "Well, we'll gladly move all of our business operations to India."

We live in a world where all of our goods are imported.   We live in a world where services can easily be done online, and streamed from anywhere in the world.

If taxes are jacked up on business and the people who run them - who will pay you to work?

Because I, in particular, would refuse business & turn away customers than need to hire someone / pay more tax.

Man, I liked it better when the old people did the voting.   So many clueless people - economic fail - thinking they know policy.

So Relic - have you any education in:

- Economics
- Business
- Law

(?)

I have in all three.   On top of that - I've got damn 10 years experience in the Business & Economics aspects too.      I look at things a different way - than: "poor me, I'm downtrodden and underpaid.   If it weren't for me, this sole person in a cubicle, the fantastically rich guy which I could never hope to be would be nothing.   This company, which he built with all his money, should belong to me - since I poured all of my riches into it."

Tell ya what.

Read up on the Bolsheviks, and champion second amendment rights.

Go get your SKS - and rally up the Democrats.   Kill the oligarchy, for the great glory of the proletariat.

Prosperity will ensue, just like in 1917. 

In the mean time, read 1984 in your spare time.   The government is great.

[relic2279]

*COUGH*

What?  Look for tax havens in the US?

Let's look abroad -

For example, Microsoft.   Threatened with higher taxes: "Well, we'll gladly move all of our business operations to India."

I think you misunderstood me. I didn't mean giant corporations. I meant Joe Millionaire running a small-time business as referenced in the link you posted. And there are tax havens in the US. Well, places where taxes are much lower than other city/states.


Though, to address what you said;

It's one thing to outsource jobs to countries like India, and put offices there, it's completely another to base your entire business there. That is why they don't do it. I could be wrong, but I can't think of a single large fortune 500 company moving their entire operations abroad.

We still offer certain economical benefits, freedoms and safety that no other country can match. Raising taxes higher will not change that.

[kyanwan]

Rich people own the businesses that give us all work, this is a given.

Now - if we have a progressive rate, that keeps on going higher - what happens?



This rich guy has no benefit to work harder, pay people, hire people - what's his motivation?

Progressive tax is a nationwide salary & earnings cap - and an effective ban on entrepreneurship & investment.

[queenmetroid]

This rich guy has no benefit to work harder, pay people, hire people - what's his motivation?

Progressive tax is a nationwide salary & earnings cap - and an effective ban on entrepreneurship & investment.

This is what I think. As I stated above, the rich do most of the investing in the world, so if you squeeze them harder, it will only hurt the people at the bottom.

Additionally, the government is greedy. Let's look at the REAL problem. Do they need that money? No. They just want it for whatever wasteful spending they thought up last week. That alone would make me against a raise in taxes.

[nates1984]

This is what I think. As I stated above, the rich do most of the investing in the world, so if you squeeze them harder, it will only hurt the people at the bottom.

The twentieth century called, they want their bullshit trickle-down economics back.

Seriously, if you still think trickle-down works, you're a fucking fool.

The people on the bottom are pretty much fucked no matter what.