Tax the rich at 70%

When the U.S. had a top tax rate of 70% there were many, many, many more deductions. Virtually no one paid 70%. I imagine it would be very similar if such a tax were reenacted, and remember, we would still have the 15% capital gains tax rate and so most very wealthy people would be paying a maximum of 15% on a huge portion of his income.

GodsGrace101 said:

NO rung allowed...
They tell me we're free people.
Stuff like this sure doesn't make me feel free.
(which we're not, of course).

Click to expand...

How do you think things like schooling, roads, policing, regulatory bodies, general public infrastructure and so on should be paid for, and by who?

Fantine said:

When the U.S. had a top tax rate of 70% there were many, many, many more deductions. Virtually no one paid 70%. I imagine it would be very similar if such a tax were reenacted, and remember, we would still have the 15% capital gains tax rate and so most very wealthy people would be paying a maximum of 15% on a huge portion of his income.

Click to expand...

Because the wealth of the really wealthy is not from income. There may not by anyone in the US making a taxable annual income of $1,000,000 unless he does his own finances on a napkin.

GodsGrace101 said:

My dear sir...
Some of them end up unemployed.
I have seen this happen right here where I live.

What do YOU think would happen to everyone that becomes unemployed?

Some do not know how to do anything else.
Some are too old and are not wanted.
Some cannot find work hear home and cannot take public transportation for one reason or another.

This is the real world.

Click to expand...

And in the real world, those who cannot provide for themselves aren't just going to shuffle off and die quietly... many of them might take a covetous look at all your stuff and decide they want it...

For the sake of argument, let's assume that the situation proposed in the OP was something that were actually being done, or that the 70% marginal rate for income over 10mil was to be put into effect. Personally, neither of these would effect my taxes... either now, or in the future. I will never be making a million dollars or more per year. Ok, so what about receiving benefits from taxing those who do? I don't have any need or desire for those, so I have no horse in this race. I don't think anyone "needs" 10 million dollars per year, but neither do I necessarily think it ought to be taken from them for that reason. Would it be nice if they did things for people in need with their extra income? For sure...and many of them do.

My main "issue" with taking vast sums of their money via extra taxation, however, is not simply the fact that they earned it and ought to keep it, but rather that I don't expect it will be put primarily to good purposes. Might some of it keep the social security benefits at 100% for longer than current projections? Sure. Will the rest be used for similar ventures, such as housing for the homeless, better healthcare for those in need of it, etc? I doubt this very much. Frankly, I expect much of it would be used to further expand our military presence throughout the world, to further fund so-called rebel groups in other nations to our advantage, to exercise social and political control via monetary leverage over sovereign nations by offering larger "aid" packages, to further expand the militarization of our own police forces, to restrict the rights of our own citizens further through programs like our "Patriot Act", not to mention raising the wages and benefits of our esteemed members of the Congress and Senate.

In short, I oppose it on the grounds that I do not want our government to have additional resources with which it can impose terrible things on either Americans or any other peoples of the world. They do enough of that already with the "meager" trillions of dollars at their disposal.

GodsGrace101 said:

I'm sure I didn't list everything...
Just trying to make the point that we keep spending more and more and bleeding our people dry.
Money should go into the economy, not the the govt.

Click to expand...

And yet the government has to provide the overhead to allow the economy to exist... let alone prosper.

350 million people over 3.8 million square miles, as you can well imagine, require a lot of overhead.

Sparagmos said:

A lot of people see that as the rich exploiting people’s labor. Offering someone pay for their work isn’t an act of benevolence, it’s a transaction. If you become rich by paying people far less than the value of their work, you are stealing IMO.

Click to expand...

Which raises the valid question of how much is your work worth?

The fact that minimum wage laws exist would seem to indicate that the employers don't think too highly... "I'd pay you less, but the government won't let me."

RDKirk said:

Because the wealth of the really wealthy is not from income. There may not by anyone in the US making a taxable annual income of $1,000,000 unless he does his own finances on a napkin.

Click to expand...

Not necessarily... think about celebrities... movie stars and pro athletes making $10 million per picture/season...

TLK Valentine said:

Not necessarily... think about celebrities... movie stars and pro athletes making $10 million per picture/season...

Click to expand...

Plus the median CEO of a publicly traded company.

RDKirk said:

Because the wealth of the really wealthy is not from income. There may not by anyone in the US making a taxable annual income of $1,000,000 unless he does his own finances on a napkin.

Click to expand...

There aren't a lot over $10m, but there are a few thousand. As best as I can figure, it's mostly big-name personalities from sports and entertainment and some CEO's.

GodsGrace101 said:

You never understand me.
Did I say not to pay taxes?
I said 70% on ANYTHING, even over 10 mil, is too much.

It's OUR money,
not the GOVERNMENTS.

I know we've been brainwashed....

Click to expand...

Wrong, you earned the money, but that does not mean that it is "your money". In fact whose money it is is determined by the law and not by you or me. The government could legally say it is all "their money" and it would be. Your objection confirms my earlier assessment.

I am not for excessive taxation. What rate is reasonable is a complex issue.

GodsGrace101 said:

Your first item falls under Protection.

We need schools so we don't have an illiterate public and become stagnant in our progress.

Roads are also necessary for progress and they run across state lines, so it has to be federal.

I'm sure I didn't list everything...
Just trying to make the point that we keep spending more and more and bleeding our people dry.
Money should go into the economy, not the the govt.

Click to expand...

Government paid health care would fall under "protection" as well. Plus just like endless local road construction with no federal oversight would only leave us with a less efficient and far more expensive service, our endlessly varying medical insurance standards give us a less efficient more expensive medical service. Though conservatives call it "socialist" government paid health care is the fiscally conservative route to take.

2019 Tax Brackets with an additional 70% over 10mil bracket added
Assumes Standard deduction and all income from wages (which is not realistic, but let's roll with it)

Rate | For Married Individuals Filing Joint Returns, Taxable Income Over | Taxes Paid
10% | $0 | $1,940
12% | $19,400 | $5,955
22% | $78,950 | $10,734
24% | $168,400 | $33,671
32% | $321,450 | $20,820
35% | $408,200 | $65,328
37% | $612,350 | $3,277,138
70% | $10,000,000 | $0

Wages $10,000,000
Standard Deduction $24,400
Taxable Income $9,975,600
Tax Liability ($3,415,586) (Effective Tax Rate = 34.16%)
After Tax $6,584,415

Click to expand...

So someone making 10mil doesn't pay a 70% rate on any of it. Let's go bigger! How about 25 million?

10% | $0 | $1,940
12% | $19,400 | $5,955
22% | $78,950 | $10,734
24% | $168,400 | $33,671
32% | $321,450 | $20,820
35% | $408,200 | $65,328
37% | $612,350 | $3,285,678
70% | $10,000,000 | $5,540,972

Wages $25,000,000
Standard Deduction $24,400
Taxable Income $24,975,600
Tax Liability ($8,965,098) (Effective Tax Rate = 35.87%)
After Tax $16,034,903

Click to expand...

Still bringing home 16 million and the effective tax rate is still less than 40%. Huh. Let's go way bigger! How about Jeff Bezos bigger? $132,000,000,000!!

10% | $0 | $1,940
12% | $19,400 | $5,955
22% | $78,950 | $10,734
24% | $168,400 | $33,671
32% | $321,450 | $20,820
35% | $408,200 | $65,328
37% | $612,350 | $3,285,678
70% | $10,000,000 | $48,836,290,972

Wages $132,000,000,000
Standard Deduction $24,400
Taxable Income $131,999,975,600
Tax Liability ($48,839,715,098) (Effective Tax Rate = 37%)
After Tax $83,160,284,903

Click to expand...

Pays almost 50 billion in taxes, comes home with 83 billion and still an effective tax rate less than 40%

But of, course none of this is realistic. For example Mr. Bezos' on paper "wages" is only (only!) about $1,700,000 per year according the linked article. The rest of that is capital gains which is only taxed at 15%. And hardly anyone making over $100,000 a year is taking the standard deduction. So, I think the rich will be okay.

KCfromNC said:

Plus the median CEO of a publicly traded company.

Click to expand...

Well those are the sort of people this tax plan is supposed to motivate... if you're paying yourself a million dollar salary, Uncle Sam wants plenty of it.

If you're investing that money back into the company, thus making it more profitable, and get a million dollars in dividends, Uncle Sam takes a much smaller cut.

TLK Valentine said:

Which raises the valid question of how much is your work worth?

The fact that minimum wage laws exist would seem to indicate that the employers don't think too highly... "I'd pay you less, but the government won't let me."

Click to expand...

I’d say the worth of your work is based on the profit it generates. Yup, employers are going to pay as little as they can get away with.

The IbanezerScrooge said:

Pays almost 50 billion in taxes, comes home with 83 billion and still an effective tax rate less than 40%

Click to expand...

How's anyone supposed to survive on such measly earnings? It's no wonder the rich need our help!

GoldenBoy89 said:

How's anyone supposed to survive on such measly earnings? It's no wonder the rich need our help!

Click to expand...

IKR? I feel bad. I've decided to take one for the team and switch places with Jeff to take on his burden and alleviate his suffering at the hands of the tyrannical government. Just waiting for his acceptance of my offer.

The IbanezerScrooge said:

IKR? I feel bad. I've decided to take one for the team and switch places with Jeff to take on his burden and alleviate his suffering at the hands of the tyrannical government. Just waiting for his acceptance of my offer.

Click to expand...

You're a better man than I am. Hope you get it. I'd tell Jeff to pull himself up by his bootstraps but he probably has an Amazon robot to do that for him.

In before being closed at OP's request. Very informative thread. Sadly, probably more informative for me than some posters who actually need to learn about taxes.