A quick history lesson. From 1940-1980:
•Wealthiest paid 70-94% marginal tax
•0 of them went broke from taxation
•0 of them left USA
•All remained exceedingly wealthy
•Manufacturing boomed
•The middle class was 62% of US economy (It's now 40% post 'trickle down scamenomics)
•We had the strongest middle class growth in US History

Let's do that again. Stop protecting billionaires. Start taxing them.
#TaxBillionaires

@QasimRashid I mean, It was abusive and unfair, which is enough reason for me to give it a hard no... **no one** should be taked out of 94% of their income, regardless if they can survive it.

That said, I can pretty much garuntee the whole "0 of them left" and "0 of them went broke" is pure nonsense, you have a source for that?

@freemo that’s not how progressive tax systems (including the now-watered-down one in the US) works. No one paid 94% of their entire income in tax, pre-Reagan - that would have been a flat tax system (which the US has never had to my knowledge), and as you so rightly point out is grotesquely unfair (especially to lower income workers) @QasimRashid

@pmonks

Yes I am well aware how income tax works. But yes as you get father above the 200K bracket the closeryoull get to 94%. So yes you have tax rates abusively high for the rich that can approach 94%, if your rich enough you are effecitvely paying 94%.

@QasimRashid

@freemo again, that’s not how progressive tax systems work. Khan Academy has a good explainer that might help explain where you’re going wrong: https://www.khanacademy.org/economics-finance-domain/core-finance/taxes-topic/taxes/v/tax-brackets-and-progressive-taxation @QasimRashid

@pmonks @QasimRashid

Please feel free to explain specifically where you think i went wrong. I deal with these sorts of taxes daily as the EVP of a company.

@freemo sure. Building on the example from Khan Academy, if I make $10,001 in income, I don’t pay 20% of the total ($2,000.20) in taxes. Rather, I pay 20% of the income that’s in the 20% bracket as tax i.e. 20% of $1, or $0.20. This is equivalent to 0.002% of my total income, not 20%.

The same pattern applies as my income goes up and the higher portions of it “land” in higher tax brackets. I’m only paying that higher tax rate on the marginal income that falls in that bracket. The net effect is that my overall effective income tax rate is *always* lower than the top tax rate I’m paying - that’s simply how the math works.

@pmonks yes.. that doesnt disagree with what i said.

If you want to talk in math terms.. as your income approaches infinity what does your effective tax rate approach? It approaches the 20%, or in the real world case 94, like I said.

@freemo and as we approach infinity, the remaining 6% also approaches infinity. Maths is fun that way.

But let’s also not forget that:
1. The 94% top tax bracket you’re quoting only existed for 1 year (1944/45)
2. To hit that bracket, one had to earn more than ~$3.5 million in today’s dollars

Even today anyone earning that much in any single year is clearly incredibly wealthy, and incurring a high absolute tax rate on the marginal income above $3.5 million doesn’t change that.

1. It was hovering in thr 90s fkr about 10 years

2. Actually closer to 2 mil or 2.5 mil and yes im aware, so. Its an abusive tax rate in my eyes regardless of how rich someone being taxed it might be.

As i said no one, including the incredibly wealthy, should ever be taxed at such an abusive rate.

@freemo the top marginal tax rate hovered around 90% from 1944 until 1963, and stayed above 70% until Reagan gutted the tax system in 1980.

Respectfully, you’re incorrect regarding the amount. The 1944/45 94% tax bracket was on incomes above $200,000, which in today’s dollars is close to (but slightly less than) $3.5 million.

Finally, I consider unrestricted wealth antithetical to healthy democracy (and also immoral, though that’s neither here nor there), and taxation is one of the few effective mechanisms we have to counter it. To one of the points one of the other commenters here made regarding the wealthy dodging income tax anyway, this is also why I’m in favour of wealth taxes (despite some of their flaws).

@pmonks

Yea its 3.3m your right there.

Wealth is not a pie, some having more doesnt mesn others have less. So its hard for me to see someone who generates wealth unethical. That say the system does have inequality issues to be addressed.

As for rich people avoiding taxes, i usually find its kore so the other way around, usually the poor and middle class seem to lie, avoid, and cover up taxes when they can far more often than the rich. Id like so find some good numbers on that though, just from what Ive seen.

@freemo @pmonks Wealth is not interchangeable with profit, it is an accumulation of profit. The profit in any given retrospective timeframe is absolutely a pie. There was only so much to be made, and if we share in that profit and you got more, I absolutely got less.

There is no such thing as a “wealth generator”, only a “profit generator” (and that sounds a good deal less lofty). Whether my profit becomes my wealth is beyond their control.

Taxes (usually) limit profit, not wealth.

@utterfiction @pmonks

No one said anything about wealth being equivelant to profit... what are you talking

When i turn a pile of sand i to a piece of glass ive created wealth, i own that wealth, and this is true regardless of if i ever sell that piece of glass or not. It has nothing to do with profit except that selling the glass and converti g the wealth i made into cash .eans i can buy more sand, make more glass, and generate more wealth.