Do you support a 70%+ tax bracket for top earners? (1 Viewer)

crosswatt

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I thought it was fairly common sense if you know your history. Our country was very prosperous during a time when we have high rates on top earners. Especially the late 40s and through the 50s.
First of all, you should tone down your condescension. It's uncalled for.

Secondly, there is simply not a correlation between tax rates and economic growth. How the economic pie is sliced maybe, but not in terms of our nation's prosperity. Either way.

The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth.
 

DaveXA

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I thought it was fairly common sense if you know your history. Our country was very prosperous during a time when we have high rates on top earners. Especially the late 40s and through the 50s.
That was more a result of economics rather than tax policy. We were rebuilding after coming out of the Great Depression and WWII. The tax rates were dramatically increased in 1932 and slowly increased until 1944 and remained around those levels until they started dropping back down in 1964. It remained pretty flat until another cut in 1982. Then in 1986 there was the big change in rates.

The country has prospered when there were high rates, declined with high rates, prospered with low rates and declined with low rates. There's little correlation between the nominal tax rate and growth in the economy. The economy is incredibly complex and there are thousands of factors that affect the country's economic policy. The Fed's monetary policy, trade, individual tax rates, corporate tax rates, capital gains rates, savings rate, geopolitics, wars and on and on.

What you call common sense tax policy really isn't as obvious as you make it sound. Income taxes is a small part of the overall puzzle. I'm not opposed to high top end tax rates, but that alone will hardly make the dent needed to cut into our nation's debt and deficits. We need both a growing economy coupled with smart tax policy and reduce the rate of growth in spending if we are going to return to a sensible fiscal policy.
 

WhoDatPhan78

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That was more a result of economics rather than tax policy. We were rebuilding after coming out of the Great Depression and WWII. The tax rates were dramatically increased in 1932 and slowly increased until 1944 and remained around those levels until they started dropping back down in 1964. It remained pretty flat until another cut in 1982. Then in 1986 there was the big change in rates.

The country has prospered when there were high rates, declined with high rates, prospered with low rates and declined with low rates. There's little correlation between the nominal tax rate and growth in the economy. The economy is incredibly complex and there are thousands of factors that affect the country's economic policy. The Fed's monetary policy, trade, individual tax rates, corporate tax rates, capital gains rates, savings rate, geopolitics, wars and on and on.

What you call common sense tax policy really isn't as obvious as you make it sound. Income taxes is a small part of the overall puzzle. I'm not opposed to high top end tax rates, but that alone will hardly make the dent needed to cut into our nation's debt and deficits. We need both a growing economy coupled with smart tax policy and reduce the rate of growth in spending if we are going to return to a sensible fiscal policy.
The high tax rates were useful when we needed to build an infrastructure and fund education to create a skilled workforce. Building infrastructure works best with almost communist-like central planning. Government it the best entity to do this.

Once that scaffolding is in place, cutting taxes and allowing the market to take advantage of that infrastructure allows for economic growth.

Our infrastructure is old and our workforce is inadequate. I think maybe it’s time to reset the cycle.
 

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The high tax rates were useful when we needed to build an infrastructure and fund education to create a skilled workforce. Building infrastructure works best with almost communist-like central planning. Government it the best entity to do this.

Once that scaffolding is in place, cutting taxes and allowing the market to take advantage of that infrastructure allows for economic growth.

Our infrastructure is old and our workforce is inadequate. I think maybe it’s time to reset the cycle.
That's a pretty reasonable take. I'd argue that it's going to take a much broader economic approach than simply tweaking tax rates to revamp our aging infrastructure. We will need a large infusion of investment into public works in tandem with increasing top tax rates and maybe look into tweaking corporate rates and incentives to get companies away from hoarding cash. It's a complex puzzle though. A war, geopolitics, political change can all tip the scales as well.
 

WhoDatPhan78

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That's a pretty reasonable take. I'd argue that it's going to take a much broader economic approach than simply tweaking tax rates to revamp our aging infrastructure. We will need a large infusion of investment into public works in tandem with increasing top tax rates and maybe look into tweaking corporate rates and incentives to get companies away from hoarding cash. It's a complex puzzle though. A war, geopolitics, political change can all tip the scales as well.
Yea, it’s not a simple situation, but I think we agree that we need a huge public investment in the United States if we’re going to remain competitive long term.
 
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N.O.Bronco

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Tax them at 70% and you destroy their ability to scale and create more jobs, thus knocking them out of the top. If people want more money, do what the top do - execute.
How many times are we going to need a marginal tax rates 101 class in this thread?
 
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How many times are we going to need a marginal tax rates 101 class in this thread?
Irrelevant. Taxing ridiculously high rates at >= $10 million or whatever # the classroom academics feel is 'fair' still impacts the rate of scale and innovation. Textbook example of the Cobra effect.

When that stops, you don't just stay where you are in business...you shrink and get squeezed out thus not being in the top anymore. Current value trends downards. It's a simple model.
 

N.O.Bronco

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No, its very relevant because it shows you aren't even coming at this from having a basic understanding of how marginal tax rates work. Or do you think you can provide empirical evidence that there is no difference between a 70% tax rate on income earned above 10 million and a 70% tax rate on all income if you earn 10 million? Because that is the only path where your claim of it being irrelevant would make sense.
 
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No, its very relevant because it shows you aren't even coming at this from having a basic understanding of how marginal tax rates work. Or do you think you can provide empirical evidence that there is no difference between a 70% tax rate on income earned above 10 million and a 70% tax rate on all income if you earn 10 million? Because that is the only path where your claim of it being irrelevant would make sense.
Of course there's a difference. This is not rocket science. That difference, however, is irrelevant to my argument.
 

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Of course there's a difference. This is not rocket science. That difference, however, is irrelevant to my argument.
Your sweeping generalization is without any supporting evidence and was rooted in an incorrect assumption about the discussion. It was relevant.

And it ironically comes on the heels of recent data and surveys that show what most of this thread has demonstrated to people like you over and over again, tax cuts are not some panacea and the relationship with tax rates and investment is far more nuanced than this binary nonsense many of you peddle. That the Trump tax cuts did little to nothing for creating additional jobs or stimulating additional growth and almost exclusively went to pad the profit margins and buy back stock. And what growth it did create is completely out of bounds with its cost(in the trillions and growing) and its perverse side effects, raising long-term inequality, complicating the tax code in ways that create perverse incentives, harming long-term economic growth potential, and raising business cycle volatility.
 
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Your sweeping generalization is without any supporting evidence and was rooted in an incorrect assumption about the discussion. It was relevant.

And it ironically comes on the heels of recent data and surveys that show what most of this thread has demonstrated to people like you over and over again, tax cuts are not some panacea and the relationship with tax rates and investment is far more nuanced than this binary nonsense many of you peddle. That the Trump tax cuts did little to nothing for creating additional jobs or stimulating additional growth and almost exclusively went to pad the profit margins and buy back stock. And what growth it did create is completely out of bounds with its cost(in the trillions and growing) and its perverse side effects, raising long-term inequality, complicating the tax code in ways that create perverse incentives, harming long-term economic growth potential, and raising business cycle volatility.
Who paid the trillions of cost you referenced?
 

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