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A 90% tax rate doesn’t actually mean the government collects that money. It just forces the money to be spent in different ways. Which is maybe a good idea! But
by forrestthewoods 6y ago
A 90% tax rate doesn’t actually mean the government collects that money. It just forces the money to be spent in different ways. Which is maybe a good idea! But that’s the actual end result.
People love to quote US income tax rates of the past. But tax revenue to GDP has been almost perfectly flat since WW2. Despite huge fluctuations in personal income tax rates. https://en.wikipedia.org/wiki/Hauser%27s_law https://en.wikipedia.org/wiki/Hauser%27s_law
- crazygringo 6y agoThe fact that tax revenue to GDP has been flat doesn't really matter, because that masks the fact of progressive taxation. The whole point of taxing billionaires 90% is so we can tax the lower class close to 0%, or even spend more on them than we collect (through education, social services, health care, etc.). It's totally fine if the overall tax revenue to GDP remains unchanged. The point isn't necessarily to raise more money, it's to address inequality by creating a level playing field for each new generation of citizens. And yes, taxation pretty much necessarily distorts spending. But loopholes are not actually that hard to fix, if we want to fix them. If we tax income and inheritance, and close taxation loopholes around things like setting up trusts/charities, then that billionaire's wealth is going to end up being collected one way or another.