"Name a Country Where 70% Tax Worked"

[FoxNewsSucks]

Found on http://all-hat-no-cattle.blogspot.com/

[rickyhall]

1. Actually it was 1981 was when Raygun started fucking the country.

[dhol82]

2. Including taxing social security.

[sandensea]

26. And they've never stopped trying

[calimary]

36. Excellent graphic!

[sandensea]

37. Thanks

I guess it shows (for anyone who wasn't already clear on that) who runs the GOPee.

[calimary]

39. LOVE this one, too!!!

[nattyice]

42. Mind if I borrow that?

[CaptainTruth]

50. That's one of my favorites! It's so true.

[moose65]

3. This framing always irks me

No one ever paid 70% of their entire income in taxes. The 70% was the marginal rate on the top level of income.

Whenever Republicans rail against “Democrat tax increases,” they deliberately conflate the marginal rate with the effective rate and make it seem like people will be paying the top rate on ALL their income. They use that to scare people and it drives me bananas.

[FoxNewsSucks]

4. True, whoever made this left out the word "marginal"

from the explanation, but the point is still made. A lot of people don't know that, and it's a good reminder that billionaires and corporations pay nowhere near their fair share, if they even pay at all.

[wryter2000]

10. Right, but

"Marginal" doesn't tell you immediately what we're talking about. There needs to be an easier way to describe it.

[muriel_volestrangler]

31. "Marginal" wasn't mentioned originally (when Dell was told at once the US had the rate up to 1980)

Link to tweet

Erik Brynjoffson immediately replies to Dell, giving the 1930s to 1970s example of the USA, and that it "worked" then.

[Johnny2X2X]

47. We worship rich guys and pretend they know about things they have no idea about

"I don't think it will grow the economy..."

Why are we asking fucking Michael Dell what he thinks will grow the economy? How would he know the first thing about that? He's a rich guy who started a computer company, I would expect him to know about computer companies and that market. I wouldn't expect he would know the first thing about what tax rates will do to economic growth in America, he has zero qualifications to talk about that.

We hold the rich in too high regard, they are usually just as clueless as everyone else on 99% of the issues they get asked about.

[Mariana]

5. That's why so many vastly overestimate how much they pay in income tax.

It never occurs to them to perform the calculations to figure out what their effective tax rate actually is.

[Grins]

41. Mitt Romney's was 14%.

As said at the time this was learned:

“Less than the gratuity a restaurant would charge for a party of six.”

[Mariana]

48. Romney intentionally overpaid tax that year

to try to fool people into thinking he pays more tax than he actually does. He donated a bunch of money to charity, and then he didn't claim it all so he could manipulate his effective tax rate to be what he thought would be politically acceptable.

https://www.nbcnews.com/news/world/romney-overpaid-his-taxes-because-hes-running-office-petes-sake-flna1B6038308

Mitt and Ann Romney also donated about $4 million -- about 30 percent of their income -- to charity in 2011, though they only claimed a deduction of about $2.25 million from those donations, according to the campaign.

That means the Romneys voluntarily paid a higher tax rate than they were legally required. The full documents, which only cover the 2011 tax returns, will be posted online at 3 p.m. today.

This can get a little complicated, so let's be clear about the details. If Romney had simply filed normally, taking all of the deductions to which he's legally entitled, he would have paid an effective tax rate of about 9 percent.

But that would have proven politically problematic, so purely for show, he deliberately overpaid the IRS, in order to increase his tax rate, on purpose. Romney was in the rather extraordinary position of selecting his own preferred tax rate, and then working backwards from there.

[Caliman73]

60. Either percentage, the 9% or 14% are less than my effective rate.

Then again, I don't have scores of accountants and lawyers I can pay to fudge my numbers.

[Ferrets are Cool]

11. Thank you x 1000

[Glaisne]

34. Exactly!

A point that needs to be made repeatedly.

[soldierant]

56. --

[louis-t]

58. And every tax giveaway to the rich is called a "jobs bill".

[WarGamer]

6. Back in the day, EVERYTHING was a deduction.

NOBODY paid 70%

[PSPS]

9. Wrong. Many of today's deductions are fairly new.

Plus, your "paid 70%" is misleading. True, nobody paid 70% effective tax rate on all of their income because that's not how taxes work. It's bracketed so that the top rate is levied only on any income within that bracket. Lots of people paid 70% on any dollars they earned in that bracket and were more than happy to do so.

[WarGamer]

12. Good reading for you

https://www.wsj.com/articles/how-wealthy-americans-like-jack-benny-avoided-paying-a-70-tax-rate-11547807401


But make no mistake: Many top earners during the high-rate era, such as politicians Dwight Eisenhower and Ronald Reagan, entertainer Jack Benny and librettist Alan Jay Lerner, didn’t pay the top rates. In 1952, for example, when the top rate was 92%, the highest-earning 1% of taxpayers had an average rate of 32%, according to Elliot Brownlee, a tax historian and emeritus professor at the University of California, Santa Barbara.


But if you disagree, lol... Professor Brownlee has written a lot about it and Google-Fu is strong...

[SunSeeker]

18. You're conflating marginal tax rate with average tax rate.

You can fall into the 92% marginal tax rate on some of your income and still end up with a 32% average tax rate if very little of your income falls into the 92% tax rate and/or you have lots of deductions/tax credits.

If we could go back to the rich paying an average tax rate of 32%, instead of the 15-23% they pay now, it would create enough revenue to pay for a lot of transformative social programs and lower the national debt. Right now, the top 400 richest families pay a lower average effective tax rate than the middle class. https://www.cbsnews.com/news/americas-richest-400-families-pay-a-lower-tax-rate-than-the-middle-class/ That is obscene.

[WarGamer]

20. I'm conflating nothing.

In 2018, the top 1% paid 26.87% in Federal Income Taxes.

https://taxfoundation.org/summary-latest-federal-income-tax-data-2018-update/

[SunSeeker]

25. Yes you are conflating it, and you're citing 2016 stats. I cited 2019 stats.

Those are not 2018 stats you're citing. Those are 2018 updates to 2016 states, as the article you cite makes clear:

The Internal Revenue Service (IRS) has recently released new data on individual income taxes for tax year 2016, showing the number of taxpayers, adjusted gross income, and income tax shares by income percentiles.

https://taxfoundation.org/summary-latest-federal-income-tax-data-2018-update/

As you know, Trump signed a massive tax cut for the rich in 2017. So, the stats for 2016 are no longer reflective of current reality. And when you say "the top 1% paid 26.87% in Federal Income Taxes," that is not marginal tax rate, but the "Average Tax Rate" (for 2016) as the table you plucked that number from explicitly states.

[WarGamer]

33. Hardly...

Your link is referring to the "Top 400 families" and is not representative of the "top 1%"

Your link doesn't even back up it's own numbers. It's basically an op-ed by 2 economists.

I never claimed 26.87% was a marginal rate. Stop putting moronic words in my mouth.

It's the average over an entire level of income earners and is comparable to the data I plucked from the 70% marginal tax era.

Seems to me you're just trying to argue facts that aren't relevant to what I've been claiming.

My claims stand.

Your claims may or may not be accurate, but they certainly don't change the accuracy of mine.

[SunSeeker]

53. Your 2016 stats were rendered irrelevant by Trump's 2017 tax cuts for the rich.

In 2018, for the first time in history, America’s richest billionaires paid a lower effective tax rate than the working class.
...
But the tipping point came in 2017, with the passage of the Tax Cuts and Jobs Act. The legislation, championed by President Trump and then-House Speaker Paul D. Ryan (R-Wis.), was a windfall for the wealthy: It lowered the top income tax bracket and slashed the corporate tax rate.

By 2018, according to Saez and Zucman, the rich were already enjoying the fruits of that legislation: The average effective tax rate paid by the top 0.1 percent of households dropped by 2.5 percentage points. The benefits promised by the bill’s supporters — higher rates of growth and business investment and a shrinking deficit — have largely failed to materialize.

https://www.washingtonpost.com/business/2019/10/08/first-time-history-us-billionaires-paid-lower-tax-rate-than-working-class-last-year/?outputType=amp

Plus, as others have stated in this thread, it's misleading to just talk about federal income taxes. We should be talking about effective total tax rate. Current law results in a smaller share paid by the richest 1 percent and the next richest 4 percent. All other groups pay a larger share of total taxes under current law compared to what they would pay under pre-TCJA law. https://itep.org/who-pays-taxes-in-america-in-2019/

[PETRUS]

44. Also, the Federal income tax isn't the whole picture.

I'm more or less agreeing with the general thrust of your argument here, and thought you might be interested in some further thoughts.

The Federal government collects taxes other than the personal income tax, as do states and localities. The actual effective tax rates (not just the statutory rates) were much higher mid-century. From Saez and Zucman (in their book, The Triumph of Injustice):

"The average tax rate of the top 0.1% income earners neared 60% in the 1950s and reached close to 70% for the top 0.01% in 1950, when higher corporate taxation generated massive revenue and equity ownership was still highly concentrated."

For comparison, the actual effective tax rate (when taking everything into consideration exactly as the above quote does) for the top 0.1% in recent years is around 30%, and is even lower for the top 0.01%.

[SunSeeker]

51. Yup. Payroll taxes, sales taxes, utility/use fees, etc. are how the poor get soaked with taxes.

So when the GOP says the poor don't pay taxes, that is total bullshit.

[twodogsbarking]

62. I was heavily involved in taxes at that time

and if you were any kind of accountant your clients didn't pay 70%. So many legal ins and outs.

[tblue37]

7. No one ever mentions that those high rates are *marginal* tax rates.

[WarGamer]

14. In 1952...The top 1% of earners paid an average 32% rate.

[Bonn1997]

57. Many people have no idea what a marginal tax system is

It is part of our country’s statistical illiteracy. I’ve heard many people, including commentators, talk about the idea that you can keep more money sometimes if you earn less because it keeps your tax rate lower. That of course is not possible.

[Calista241]

8. Very few people would pay a 70% income tax.

Nobody gets really, really rich through taking a regular salary that's subject to regular tax rates.

Extremely rich people are typically compensated in stock / options, granted at certain times and under certain conditions in thei r employment. And those stocks / options are is not worth anything until it is sold. When it is sold, it's usually treated as capital gains and taxed at that rate. This is how Steve Jobs, Michael Dell, Donald Trump, and other very rich people always took a salary of $1.

And it's not as simple as just increasing capital gains tax rates either. Unions, retirees, and others have come to rely on the market for their income. Increasing their capital gains taxes would have a severely detrimental effect.

Increase capital gains taxes too much, and people may choose to invest in the market less, which means companies are worth less, and have less capital to invest in employees, facilities, growth, R&D, and other projects. Companies, with a handful of exceptions, do not just sit on money. They may keep some savings as a backup for hard times, but for the most part, this money is invested in the company.

The current 15% capital gains rate can surely be increased, but the trick is to do it without going too far.

[jmowreader]

13. Would it be possible to make multiple capital gains tax rates?

Have one for retirees living on income from investments.

Another for people who buy and hold stock.

And a higher rate for people buying stock with incentive stock options, which is how rich people get paid.

[WarGamer]

15. YES!! One of the best ideas...

[Calista241]

16. A lot of CEO's are of the age to take social security.

And lots of options are exercised by an estate for people that are in that age range. There's always going to be ways to game the system. It's a hard question, with no easy answers.

It just irks me that people are like "tax them at 70% or 90%" as if that solves all our problems.

[JI7]

28. Right, Wealthy people need to pay more taxes for sure

but for the things that some people call for it would mean taxing just about everyone a lot more.

Those countries in Europe they point to have all people paying a lot more taxes than we do here.

[OnlinePoker]

46. I'm curious, how much do you think they need to pay?

According to the link upthread, the top 10% paid 69.5% of all income tax in 2016.

[Moostache]

49. what was the top 10% share of GROSS income?

Yeah, they paid a majority of total dollars, but the percentage of their income that was taxed was significantly less than most I believe...if I am wrong I am sure someone can set me straight,...

[OnlinePoker]

55. Their gross income was 46.6% of all gross income earned that year.

As someone else has pointed out, though, these figures were before Trump gave them a massive tax cut so it will be interesting to see how much of a difference that cut made to how much they pay.

[OnlinePoker]

45. Or treat all incoming money from whatever source as basic income.

No capital gains taxes at all. It would sure make the tax code a lot easier.

[jmowreader]

54. In some cases, the capital gains rate is a useful tool

In the OLD days, the capital gains tax encouraged people to leave their money in an investment long-term.

But since that's an increasingly rare style of investing, it's pretty much become a preferential tax rate for people who can afford to wait two years to cash their paychecks.

[muriel_volestrangler]

35. So tax capital gains at the same marginal rates that person would have for income

The "people may choose to invest less" argument can equally be made for work; the difference is that if you don't invest your excess money, you have little choice other than to spend it (which still helps the economy). If you decide that you're taxed too heavily for it to be worth working more, then you may just do nothing instead. So high taxation of capital gains matters less than of true earnings from work.

[BobTheSubgenius]

17. How can anyone be so uninformed as to make comments like that?

Especially someone who, I'm sure, wants to be known for his intelligence and acumen.

[roamer65]

19. The 1982 top marginal rate was 50 percent.

Suck on that, Dell.

[ZonkerHarris]

21. Tax the rich baby

[ChoppinBroccoli]

22. And Republicans Call That Time In Our History "The Good Old Days"

Probably for a different reason, though. You know what I'm talking about.

[Warpy]

23. The rich hated it because their net worth wasn't keeping up with inflation

Never mind there was such a sustained boom that they were raking in the dividends.

IOW, check out those historic P/E ratios, dumbass.

[JHB]

24. Let's also look at the distribution of those rates.

Let's use a snapshot of good ol'1955, right smack in the middle of "I want my country back" territory.

There were 24 tax brackets. Converted to 2013 dollars (because those are the numbers I have) 16 of them kicked in at incomes above the $250K mark. Back in the Obama years the debate was "Is $250K 'rich'?" but, as if by magic, nobody mentioned that during WW2/Cold War capitalism, 2/3rds of the tax brackets affected incomes above that mark.

11 of those 1955 brackets affected incomes above the equivalent of $500K. 45%.

The top rate of 91% kicked in on taxable income above about $3.5 million.

It's not as if that did anything for us, unless you count getting out of the Depression, beating the Nazis and Imperial Japan, widespread postwar prosperity, and winning the Cold War. But if those thing were important surely we'd hear about them from TV talking heads with multi-million dollar incomes that would be directly affected by rates like that, wouldn't we?

[NoMoreRepugs]

27. This.

[colsohlibgal]

29. Do A Little Research Mr. Dell

Yep it all worked well from FDR to the B Hollywood Actor.

Reagan did a ton of Damage....BTW the two Presidents that cases the most damage in my lifetime were both non Politicians and both Republicans.

Think we are in for a turbulent times going forward, there are millions of people who have taken leave of their senses and lots of them are armed to the teeth.

[UpInArms]

30. The following companies had effective rates of 0% or less, according to the report:

Nearly 100 Fortune 500 companies effectively paid no federal taxes in 2018, according to a new report.

The study by the Institute on Taxation and Economic Policy, a left-leaning think tank, covers the first year following passage of the Tax Cuts and Jobs Act championed by President Donald Trump, which was signed into law in December 2017.

Phillips-Van Heusen
Gannett
INTL FCStone
Murphy Oil
AECOM Technology
International Business Machines
CenturyLink
DowDuPont
Activision Blizzard
Avis Budget Group
Celanese
JetBlue Airways
Deere
First Data
Duke Energy
Pitney Bowes
Freeport-McMoRan Copper & Gold
WEC Energy Group
Levi Strauss
Brighthouse Financial
Aramark
Whirlpool
Prudential Financial
Trinity Industries
Ryder System
United States Steel
Eli Lilly
CMS Energy
Tapestry
EOG Resources
Beacon Roofing Supply
SPX
Realogy
Public Service Enterprise Group
Rockwell Collins
Goodyear Tire & Rubber
MDU Resources
FedEx
Williams
SpartanNash
Chevron
Delta Air Lines
Edison International
Penske Automotive Group
Principal Financial
PulteGroup
Air Products & Chemicals
Honeywell International
Netflix
General Motors
Tenet Healthcare
Xcel Energy
Halliburton
MGM Resorts International
Atmos Energy
Molson Coors
Nvidia
PPL
American Electric Power
Starbucks
Dominion Resources
Mohawk Industries
DTE Energy
Amazon
Andersons
Kinder Morgan
Owens Corning
Devon Energy
DXC Technology
FirstEnergy
Ameren
Hartford Financial Services
Alaska Air Group
Darden Restaurants
Ally Financial
Sanmina-SCI
Builders FirstSource
McKesson
Occidental Petroleum
UGI
Westrock
AK Steel Holding
ABM Industries
Cliffs Natural Resources
AMR
Chesapeake Energy
HD Supply
Navistar International
Pioneer Natural Resources
Salesforce.com
Visteon

https://www.cnbc.com/2019/12/16/these-91-fortune-500-companies-didnt-pay-federal-taxes-in-2018.html

[Amishman]

32. not a good meme, the effective tax rate was never that high

exceptions, loopholes, and credits made sure no one actually paid anything near those top line rates.

https://www.taxpolicycenter.org/taxvox/effective-income-tax-rates-have-fallen-top-one-percent-world-war-ii

In 1945, when the top statutory income tax rate was 94 percent, the effective tax rate on the top 1 percent was about 40 percent. Taxpayers with even larger incomes faced even higher effective tax rates, peaking at about 65 percent of income for those in the top 0.001 percent. In other words, those taxpayers paid about 65 percent of their AGI in federal income taxes.

[Picaro]

38. Uh...this one

Michael Dell apparently spent more time in his dorm room building PCs than attending class at UT.

Both the US and the UK are classic cases of government being starved for tax revenue and harming the greater percentage of the population.

Only the upper 10% of the country do well as their wealth has shot up while the economically disadvantaged refuse to vanish in spite of all that incentive provided to them.


The argument goes like this… If you tax the well off they will suddenly stop working and stop creating all that wealth that they create. But if you start the poor they will suddenly discover those bootstraps that they’ve been failing to utilize all these years and with a mighty groan and a massive shove they will pull themselves up into the lower middle class.

The truth is that high tax rates on the economically advantaged create a world that is much much better than the world we live in today. Life is better for not only the less well-off but also that are for those that are well off.

[bucolic_frolic]

40. I never buy Dell and never will. Thanks for reminding me. /nt

[Aussie105]

61. I'm sorry.

I bought 2 Dell laptops at the end of last year.

Based on price and technology inside them.

If I'd known Mr Dell was such a creep, I'd shopped elsewhere.

[JCMach1]

43. People built companies and did massive R&D in those days

Rather than gamifying their capital

[KY_EnviroGuy]

59. Dell's brain is controlled by his spite for taxes and regulation.

Typical Texas bidnessman, wanting cheap labor and no gubmint.

All hat, no cattle.........

[Beartracks]

63. It depends on how one defines "worked." And Republicans have a different definition.

If something provides for the health, safety, welfare, and economic wellbeing of the majority of Americans, especially the low- and middle-class, then it is not, according to Republicans, "working," because it is not maximizing profits for the rich. Only policies and priorities that maximize profits for the rich are what "works," according to Republicans.

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