4 ms·

FWIW, it used to be law. Tax rate on the top-1% of earners in the US was much, much, MUCH higher until the recent four or so decades.

asdkhadsj 8y ago
At this rate I'd be happy if they simply paid as much as everyone else (percentage wise). Rather, that they didn't find as many legal tax avoidance methods. I don't know if they should be taxed more than the 99%, I'll let someone who knows economics tell me what is best.
- jtolmar 8y ago
  The richest people make their money primarily from capital investment, which has returns proportional to the capital invested, which in the long run is exponential. Laborers make their money primarily from effort over time, which is linear. So it makes sense for their taxes to be different. Additionally the amount of money someone needs to live comfortably is more or less constant (regional differences apply), so it's less harmful to tax someone with more than that than someone with less. An economist will tell you that a handful of taxes are inherently helpful and getting money is a nice bonus (externalities taxes, some amount of LVT). If you need more money than what you can get through those (and you do) then the least harmful tax is a wealth tax, but those are unpopular and difficult to administrate. Income-based taxes are less efficient but still okay. Sales taxes aren't very good at all.
Turing_Machine 8y ago
It is a common misconception that high income tax rates would affect the ultra-wealthy to any significant degree. It would not, because their wealth almost never appears as ordinary income. High income tax rates (such as we indeed used to have in the United States) affect people like dentists and pediatricians, not people like Bill Gates or Warren Buffet. Note that Steve Jobs, Larry Page, Sergei Brin, Mitt Romney, and Michael Bloomberg, among others, have all "taken a salary of $1/year" as a publicity stunt at various times, yet somehow managed to wind up billionaires in spite of that. Harry Reid never had a real job in his entire life, and never had any ordinary income outside his congressional salary, but wound up massively wealthy nonetheless. Try proposing a tax on net worth/assets and see how many of the Pelosis, Feinsteins, Heinz-Kerrys, Warrens, Obamas, or Kennedys sign off on that.
- dahdum 8y ago
  Capital gains tax in the US is among the top in the world, and if you live in California I believe it's #2 considering the state's 13.3% addition. You're right that net worth taxes are non-starter virtually everywhere, that's one thing both parties will always agree on. Reid is only worth about $10M at 78 years old, not exactly massively wealthy, it brings him just barely into the 1%.
leesec 8y ago
Source? Genuinely curious.
- refurb 8y ago
  Just do a search for historical tax brackets. The OP is correct, however he doesn’t follow up with the effective tax rate paid. In the 1940s there were a lot more tax deductions. The effective tax rate for those in the top 1% hasn’t changed all that much and is near historical highs.
  - komali2 8y ago
    Isn't it true though that also the top 1% has far more "net worth" compared to, say, the GDP, than before? I recall reading something similar when delving down this wikipedia hole: https://en.wikipedia.org/wiki/List_of_richest_Americans_in_history https://en.wikipedia.org/wiki/List_of_richest_Americans_in_h...

asdkhadsj 8y ago

At this rate I'd be happy if they simply paid as much as everyone else (percentage wise). Rather, that they didn't find as many legal tax avoidance methods. I don't know if they should be taxed more than the 99%, I'll let someone who knows economics tell me what is best.

jtolmar 8y ago
The richest people make their money primarily from capital investment, which has returns proportional to the capital invested, which in the long run is exponential. Laborers make their money primarily from effort over time, which is linear. So it makes sense for their taxes to be different. Additionally the amount of money someone needs to live comfortably is more or less constant (regional differences apply), so it's less harmful to tax someone with more than that than someone with less. An economist will tell you that a handful of taxes are inherently helpful and getting money is a nice bonus (externalities taxes, some amount of LVT). If you need more money than what you can get through those (and you do) then the least harmful tax is a wealth tax, but those are unpopular and difficult to administrate. Income-based taxes are less efficient but still okay. Sales taxes aren't very good at all.

Turing_Machine 8y ago

It is a common misconception that high income tax rates would affect the ultra-wealthy to any significant degree. It would not, because their wealth almost never appears as ordinary income. High income tax rates (such as we indeed used to have in the United States) affect people like dentists and pediatricians, not people like Bill Gates or Warren Buffet. Note that Steve Jobs, Larry Page, Sergei Brin, Mitt Romney, and Michael Bloomberg, among others, have all "taken a salary of $1/year" as a publicity stunt at various times, yet somehow managed to wind up billionaires in spite of that. Harry Reid never had a real job in his entire life, and never had any ordinary income outside his congressional salary, but wound up massively wealthy nonetheless. Try proposing a tax on net worth/assets and see how many of the Pelosis, Feinsteins, Heinz-Kerrys, Warrens, Obamas, or Kennedys sign off on that.

dahdum 8y ago
Capital gains tax in the US is among the top in the world, and if you live in California I believe it's #2 considering the state's 13.3% addition. You're right that net worth taxes are non-starter virtually everywhere, that's one thing both parties will always agree on. Reid is only worth about $10M at 78 years old, not exactly massively wealthy, it brings him just barely into the 1%.

leesec 8y ago

Source? Genuinely curious.

refurb 8y ago
Just do a search for historical tax brackets. The OP is correct, however he doesn’t follow up with the effective tax rate paid. In the 1940s there were a lot more tax deductions. The effective tax rate for those in the top 1% hasn’t changed all that much and is near historical highs.
- komali2 8y ago
  Isn't it true though that also the top 1% has far more "net worth" compared to, say, the GDP, than before? I recall reading something similar when delving down this wikipedia hole: https://en.wikipedia.org/wiki/List_of_richest_Americans_in_history https://en.wikipedia.org/wiki/List_of_richest_Americans_in_h...