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A good case for increasing the top marginal rate can be found in this article by Ezra Klein .
Except for the part where he compared a rich person's income tax to a middle income earner's income + payroll taxes it is a pretty good article.
Here is a sample (he is talking about the Bush tax cuts):
It would be one thing, Levine says, if the economy had performed so much better after taxes on the rich were cut. But it didn’t. Some of the fastest economic growth of the post-war period came in the 1950s, when the top tax rate was above 80 percent. The slowest growth came in the 2000s, when the top tax rate was 35 percent. ...
Thursday, April 19, 2012
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Very interesting. No doubt Rs will tell him he can pay as much in taxes as he likes, as they have been telling Warren Buffet. Of course that suggestion is missing the point entirely. Wayne and Rs point out rightly that estimates of the revenue increase from raising the rates on the wealthy is a drop in the bucket compared to the budget deficits. A fairily large drop, but a drop nonetheless. I agree with those that would like to see the Bush tax cuts expire.
ReplyDeleteOne thing that Levine got wrong is that during the 50s the top tax rate was actually 91%. In 1952, the year of my birth, the top rate was 92%. In inflation adjusted dollars the top rate kicked in at about $1.7 million. And there were a LOT of rates between 0 and 91. So suffice it to say that the wealthy, according to today's national discussion, were not able to create jobs. And yet the economy grew faster than it has in it's history. Plus during the war, deficit spending as a % of GNP was even higher than today...way over 100%, with a tax rate structure that would make today's look free and easy.
So, what conclusions can be drawn from these historical stats?
It seems to me that they fly in the face of practically every argument being made in Washington these days. But it is dangerous to infer too much. There is much about today that is different from the 40s and 50s. What are other's thoughts?
Rather than guess I will simply ask. What part of the comparison between a rich person’s income tax and a middle income earner’s income + payroll taxes was not to your (Wayne's) liking?
ReplyDeleteGood article and I believe that he did not use the word “fair” even once.
Apples and oranges I think. But even if he combined them in both cases he could not legitimately claim that this proves that Income Taxes are not sufficiently progressive.
ReplyDelete