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Let's not forget that the 70% rate brought in less than 1% of total tax revenue. (One reason that democrats suggested lowering the top rate in 1981.) Those hi

by opo 5y ago

Let's not forget that the 70% rate brought in less than 1% of total tax revenue. (One reason that democrats suggested lowering the top rate in 1981.) Those high rates encouraged all kinds of unproductive investments to take advantage of loopholes built into the law. Where people couldn't get around the rates, there were deadweight losses from economic activity that didn't occur. Even if someone thinks it is morally ok to take that much of someone's income, those kinds of high rates hurt the economy.

adamnemecek 5y ago
I don’t think it was 1%.
- gamblor956 5y ago
  It was less than one percent, "Of the $517 billion the Treasury collected in 1980, only $3 billion to $5 billion came from the 70 percent bracket — less than 1 percent of total tax revenue." But that was also because we had many fewer millionaires and billionaires back then. The same rate and thresholds in 2021 would represent a significant fraction of the tax revenue raised by the IRS in 2021. Estimates range between 5 and 15%, depending on the pundit. (And even the notoriously right-wing "Tax Foundation" notes that a 70% rate would raise more than 150 billion in additional tax revenue.)
  - opo 5y ago
    >...The same rate and thresholds in 2021 would represent a significant fraction of the tax revenue raised by the IRS in 2021. Estimates range between 5 and 15%, depending on the pundit. I don't understand what you mean here by 'thresholds'? Are you suggesting a politician is proposing a 70% tax rate starting at 108 thousand? If not what are you saying? And what pundits are claiming 15% tax revenue for such a tax? >...even the notoriously right-wing "Tax Foundation" From looking at their web site, this is not how that organization would describe themselves. Labeling someone 'notorious right wing' is just a shallow low effort attack. These sort of preemptive attacks to poison the well don't really belong here. The guidelines recommend against this kind of behavior: 'When disagreeing, please reply to the argument instead of calling names. ', 'Please don't sneer,' etc If you think, they are misrepresenting facts, argue against that. >..."Tax Foundation" notes that a 70% rate would raise more than 150 billion in additional tax revenue.) I searched their web site to see how they came up with that, and didn't find what you are talking about. I only found this page: https://taxfoundation.org/70-tax-proposal/ https://taxfoundation.org/70-tax-proposal/ They estimate one version of a 70% tax would bring in 189 billion additional revenue over a period of 10 years and the other version would result in a tax loss of 63 billion over 10 years. Where are you seeing them estimating 150 billion in one year?
    - gamblor956 5y ago
      The U.S. uses a progressive tax rate, meaning that only income above a "threshold" is subject to that tax rate (or a higher rate). The threshold for the proposed 70% rate is $1 million, so no middle class individual would be paying it. (And note that the thresholds are adjusted for inflation, automatically.) The Tax Foundation was originally founded as a non-partisan think tank. In the 1990s, it shifted to a right-wing organization, and has generally issued nearly all of its "analyses" at the request of the GOP or its extremely conservative donors, including among them the Mercer family and the Koch brothers. Of crucial importance: the Tax Foundation has criticized every Democratic tax, and gushed over every Republican tax policy of the past 4 decades, and been completely wrong in the its analysis of the outcomes, to the extent that it is now a running joke in the tax community that the most likely outcome of a tax proposal is the opposite of what the Tax Foundation says it will be. My comment notes that even the TF low-balling the tax proposal would raise over $150 billion; I did not specify a time-frame. Conventional analyses note that the tax proposal is expected to raise at least $290 billion of the next 10 years, and have proven more accurate than the "dynamic scoring" methodology used by the TF, which takes into account subjective ideological factors rather than data-based factors used by conventional scoring methodologies.
      - opo 5y ago
        It really isn't clear to me what you are trying to say. As I pointed out, and you agreed, the 70% tax rates in the 1970's brought in <1% of total federal tax revenue. You then added: >…The same rate and thresholds in 2021 would represent a significant fraction of the tax revenue raised by the IRS in 2021. Estimates range between 5 and 15%, depending on the pundit. I then asked for clarification on where the 70% margin would start. >…The threshold for the proposed 70% rate is $1 million, What politician is suggesting a 70% rate a million? The suggestion by AOC was for a 70% rate at 10 million. >In the 1990s, it shifted to a right-wing organization, The wikipedia entry looks like a balanced take: >…Its research and analysis has historically emphasized publicizing federal and state financial information, arguing against the use of tax systems for "social engineering," and urging "broad bases and low rates" tax reform. I don't think their goals have changed: >…The Tax Foundation's first project was a successful effort to stop a tax increase in Westchester County, New York, where they provided research and analysis (including an "Expenditure Survey" of state spending) to local activists. https://en.wikipedia.org/wiki/Tax_Foundation https://en.wikipedia.org/wiki/Tax_Foundation Trying to label a group or to talk about polarizing donors instead of their actual argument are just low effort attempts to poison the well. >…My comment notes that even the TF low-balling the tax proposal would raise over $150 billion; You haven't provided any analysis showing that they are "low balling" the revenue. Also they did not say it would raise 150 billion. (I don't know if you are simply misremembering, you are trying to mislead or if there is a different report on their web site.) They said it would depend greatly on the specifics of how it was done, so they showed two scenarios and in one version of a 70% tax would bring in 189 billion additional revenue over a period of 10 years and the other version would result in a tax loss of 63 billion over 10 years. >…I did not specify a time-frame. To be charitable, I thought that since you were saying how a 70% rate would raise 5-15 percent of federal revenue, that you must be thinking it was that much every year, otherwise you would likely just be trying to mislead by implying they had some level of agreement with you by conveniently not mentioning the actual timeframe they were using. >…Conventional analyses note that the tax proposal is expected to raise at least $290 billion of the next 10 years, You have provided no citation for that. Indeed the Tax Foundation is talking about the AOC proposal of a 70% tax rate at ten million, and you now seem to be saying that you are talking about a 70% tax rate starting at 1 million. Your point at the start was: >...The same rate and thresholds in 2021 would represent a significant fraction of the tax revenue raised by the IRS in 2021. Estimates range between 5 and 15%, depending on the pundit. Federal revenue this year will be about 1.9 trillion. Even if your proposed tax would bring in an average of 29 billion a year, that is obviously not 5-15 percent of IRS tax revenue - it is much closer to 1%.

by opo 5y ago

adamnemecek 5y ago

I don’t think it was 1%.

gamblor956 5y ago
It was less than one percent, "Of the $517 billion the Treasury collected in 1980, only $3 billion to $5 billion came from the 70 percent bracket — less than 1 percent of total tax revenue." But that was also because we had many fewer millionaires and billionaires back then. The same rate and thresholds in 2021 would represent a significant fraction of the tax revenue raised by the IRS in 2021. Estimates range between 5 and 15%, depending on the pundit. (And even the notoriously right-wing "Tax Foundation" notes that a 70% rate would raise more than 150 billion in additional tax revenue.)
- opo 5y ago
  >...The same rate and thresholds in 2021 would represent a significant fraction of the tax revenue raised by the IRS in 2021. Estimates range between 5 and 15%, depending on the pundit. I don't understand what you mean here by 'thresholds'? Are you suggesting a politician is proposing a 70% tax rate starting at 108 thousand? If not what are you saying? And what pundits are claiming 15% tax revenue for such a tax? >...even the notoriously right-wing "Tax Foundation" From looking at their web site, this is not how that organization would describe themselves. Labeling someone 'notorious right wing' is just a shallow low effort attack. These sort of preemptive attacks to poison the well don't really belong here. The guidelines recommend against this kind of behavior: 'When disagreeing, please reply to the argument instead of calling names. ', 'Please don't sneer,' etc If you think, they are misrepresenting facts, argue against that. >..."Tax Foundation" notes that a 70% rate would raise more than 150 billion in additional tax revenue.) I searched their web site to see how they came up with that, and didn't find what you are talking about. I only found this page: https://taxfoundation.org/70-tax-proposal/ https://taxfoundation.org/70-tax-proposal/ They estimate one version of a 70% tax would bring in 189 billion additional revenue over a period of 10 years and the other version would result in a tax loss of 63 billion over 10 years. Where are you seeing them estimating 150 billion in one year?
  - gamblor956 5y ago
    The U.S. uses a progressive tax rate, meaning that only income above a "threshold" is subject to that tax rate (or a higher rate). The threshold for the proposed 70% rate is $1 million, so no middle class individual would be paying it. (And note that the thresholds are adjusted for inflation, automatically.) The Tax Foundation was originally founded as a non-partisan think tank. In the 1990s, it shifted to a right-wing organization, and has generally issued nearly all of its "analyses" at the request of the GOP or its extremely conservative donors, including among them the Mercer family and the Koch brothers. Of crucial importance: the Tax Foundation has criticized every Democratic tax, and gushed over every Republican tax policy of the past 4 decades, and been completely wrong in the its analysis of the outcomes, to the extent that it is now a running joke in the tax community that the most likely outcome of a tax proposal is the opposite of what the Tax Foundation says it will be. My comment notes that even the TF low-balling the tax proposal would raise over $150 billion; I did not specify a time-frame. Conventional analyses note that the tax proposal is expected to raise at least $290 billion of the next 10 years, and have proven more accurate than the "dynamic scoring" methodology used by the TF, which takes into account subjective ideological factors rather than data-based factors used by conventional scoring methodologies.
    - opo 5y ago
      It really isn't clear to me what you are trying to say. As I pointed out, and you agreed, the 70% tax rates in the 1970's brought in <1% of total federal tax revenue. You then added: >…The same rate and thresholds in 2021 would represent a significant fraction of the tax revenue raised by the IRS in 2021. Estimates range between 5 and 15%, depending on the pundit. I then asked for clarification on where the 70% margin would start. >…The threshold for the proposed 70% rate is $1 million, What politician is suggesting a 70% rate a million? The suggestion by AOC was for a 70% rate at 10 million. >In the 1990s, it shifted to a right-wing organization, The wikipedia entry looks like a balanced take: >…Its research and analysis has historically emphasized publicizing federal and state financial information, arguing against the use of tax systems for "social engineering," and urging "broad bases and low rates" tax reform. I don't think their goals have changed: >…The Tax Foundation's first project was a successful effort to stop a tax increase in Westchester County, New York, where they provided research and analysis (including an "Expenditure Survey" of state spending) to local activists. https://en.wikipedia.org/wiki/Tax_Foundation https://en.wikipedia.org/wiki/Tax_Foundation Trying to label a group or to talk about polarizing donors instead of their actual argument are just low effort attempts to poison the well. >…My comment notes that even the TF low-balling the tax proposal would raise over $150 billion; You haven't provided any analysis showing that they are "low balling" the revenue. Also they did not say it would raise 150 billion. (I don't know if you are simply misremembering, you are trying to mislead or if there is a different report on their web site.) They said it would depend greatly on the specifics of how it was done, so they showed two scenarios and in one version of a 70% tax would bring in 189 billion additional revenue over a period of 10 years and the other version would result in a tax loss of 63 billion over 10 years. >…I did not specify a time-frame. To be charitable, I thought that since you were saying how a 70% rate would raise 5-15 percent of federal revenue, that you must be thinking it was that much every year, otherwise you would likely just be trying to mislead by implying they had some level of agreement with you by conveniently not mentioning the actual timeframe they were using. >…Conventional analyses note that the tax proposal is expected to raise at least $290 billion of the next 10 years, You have provided no citation for that. Indeed the Tax Foundation is talking about the AOC proposal of a 70% tax rate at ten million, and you now seem to be saying that you are talking about a 70% tax rate starting at 1 million. Your point at the start was: >...The same rate and thresholds in 2021 would represent a significant fraction of the tax revenue raised by the IRS in 2021. Estimates range between 5 and 15%, depending on the pundit. Federal revenue this year will be about 1.9 trillion. Even if your proposed tax would bring in an average of 29 billion a year, that is obviously not 5-15 percent of IRS tax revenue - it is much closer to 1%.