Increasing numbers of American billionaires have appeared since the Republicans began cutting taxes for the rich, first under President Reagan, then under Bush Jr (Bush Sr condemned this as “voodoo economics” even before Reagan’s time) and finally under Trump. And it’s time we ended that crap forever! The proliferation of billionaires is not a sign of economic prosperity, but distress, since the members of the working class have not increased their buying power in the same time. That would only happen if their wages went up, but economic conservatives tend to oppose that and thus the federal minimum wage remains at $7.25 per hour. A person CANNOT make a living at such a wage!
It is a moral and logical imperative that we raise marginal tax rates on the wealthy to properly fund the government and prevent economic tyranny from those same rich people.
Imagine such a tax policy in place. If we have a tax rate of 0% for people who make up to $50,000 per year, a rate of 30% on those who make up to $100,000 per year, 50% for those who make up to $1,000,000 per year, and finally 90% for those who make above $1,000,000 per year, here’s what the results would look like.
First example is a person with annual wages of $90,000. He would pay nothing on the first $50,000 and then 30% on the remaining $40,000, so he would pay $12,000 in tax, resulting in his keeping $78,000.
Second example is someone with annual wages of $800,000. He would pay nothing on the first $50,000 and then would pay 30% on the next $50,000 ($15,000 in tax) and then 50% of the remaining $700,000 ($350,000 in tax). Thus he would keep $435,000.
Finally, you have someone who makes $100,000,000 per year. His tax rates would be nothing on the first $50,000 and then would pay 30% on the next $50,000 ($15,000 in tax), 50% of the next $900,000 ($450,000 in tax) and finally 90% of $99,000,000 ($89,100,000 in tax). Thus he would keep $10,435,000. He would still be rich!
The ONLY ethical reason to lower taxes on ANY people is if those tax rates were so high that they were keeping people in poverty. That only applies to the working class.
As I noted a long time ago:
Two Reasons for Public Ignorance
We delude ourselves into thinking that if having a million dollars is good, having ten million must be better, so we strive for that while never thinking of anyone who considers himself lucky to even have $100,000. Or never gets even close to having that much.
Greed is a vice and we must do everything we can to condemn it and prevent people from getting away with it.
Obama bashing, Libertarian style
Tax hikes on the wealthy are to punish GREED, not success. There’s nothing wrong with making enough money to live comfortably on, but if you make enough to become a BILLIONAIRE, you become more of a parasite than a contributor to the economy.
And hearing that so many of these rich people have become even RICHER even in the economic downturn caused by the Covid-19 pandemic (throwing millions of workers into unemployment) makes me want to go after them!
Incidentally, Wayne Allyn Root, the guy who wrote that cynical hit piece I quoted in the blog entry about President Obama, was later disowned by most of the other Libertarians because of his racism and his constant lying. He is now a Republican and ally of Donald Trump. If I were God, I’d send that bastard to hell!
And here is a cartoon that also explains how marginal taxes work:
I have heard arguments that high tax rates are good for the economy. That being the case, why did we have the Great Depression?
That’s a good question. I guess there were a variety of factors that played on each other to make the Great Depression as severe as it was. Just one or two of them might have only triggered a short and mild recession. I doubt we will see another Great Depression in at least another century.
Dale Husband, what are your thoughts on the capital gains tax and the estate tax?
I see them as unnecessary. Personal income taxes should be enough to fund the government. We should make the tax systems as simple as possible so the average person can relate to it. If they can’t, then distrust of the revenue process may result.
Dale Husband, if you don’t mind my inquiry, what are your political inclinations: Centrist, Left- leaning, libertarian or conservative?
I consider myself a liberal with leftist tendencies, with a few civil libertarian traits thrown in. You could say I am a libertarian socialist.
Conservatives have lied so much about “socialism” that few Americans even know what it was made to do or to stop in terms of economic reforms to remedy the abuses of corporatist capitalism.
Dale Husband, I don’t mean to seem ill-informed or naive, however, would libertarian-socialism have libertarian-leaning inclinations on some issues and more Socialist inclinations on other issues? Maybe you can help me to understand the difference.
The basic premise behind all human rights is personal autonomy; every person should be allowed to live as he pleases as long as he does no harm to others. But this applies only to individuals. Collective entities, such as corporations and states, must be kept under strict regulation and legal restrictions to prevent them from abusing individuals, even those who work directly for those collective entities. The process of democracy would enable the citizens and workers to have a voice and a vote in all matters of governmental and economic affairs.
Dale Husband, I would consider myself as a Constitutional Conservative/Libertarian. Here is how I would explain it: If the Constitution says nothing about any specific issues that should not be legislated at the federal level, the issues should be at the discretion of individual states or between consenting parties.
I also think that if you win money or other prizes in a game show, you shouldn’t pay any taxes on those winnings. If you win $1,000,000, for example, you should get $1,000,000 and not a penny less.
Dale Husband, I agree with you on that.
Dale Husband, I get the argument that inherited wealth is not earned. What about wealth that is accumulated through investments? Is that technically earned or unearned wealth?
I would consider such wealth unearned because it was made off the manual labor of workers. Money made from your OWN hard work is what is truly earned.
Dale Husband, no argument there.
Dale Husband, the reason for my opposition to the estate tax is not due to a desire to benefit the wealthy. It is just because of a generalized distrust of the government to manage that revenue well.