To Save US Democracy, Tax the Rich at 90%

[Kid Berwyn]

To Save US Democracy, Tax the Rich at 90%

Thom Hartmann
CommonDreams, June 3, 2023

Wealthy people in America screamed and yelled when FDR said he would do it, claiming a hike from 25% to 90% would crash the economy, but instead that top tax rate kicked off the first middle class to encompass more than half a nation’s population in world history.

SNIP…

America’s billionaires (and soon to be trillionaires) pay an average of around 3.1 percent as their functional income tax rate; as a result, America is the most unequal developed society in the world. The last time severe poverty and extravagant wealth coexisted in such extremes as today in this country was during the 1920s and 1930s.

SNIP…

FDR raised the top income tax bracket from 25 to 90 percent. Wealthy people in America screamed and yelled, claiming it would crash the economy, but instead that top tax rate kicked off the first middle class to encompass more than half a nation’s population in world history.

As Roosevelt noted in 1936:

“A number of my friends who belong in the very high upper brackets have suggested to me on several occasions of late, that if I am reelected president, they will have to move to some other nation because of high taxes here.

“Now, I will miss them very much...” (audience breaks into laughter)

FDR created America’s first widespread middle class with a combination of high taxes on the rich and strong unions for working class people. He broke the politically corrupt power of organized wealth for two generations.

SNIP…

So, here we are in a situation much like the one that FDR faced when he first came into office in 1933. Homelessness stalks the nation; three morbidly rich individuals own more wealth than the bottom half of Americans; gun crime is at Bonnie and Clyde levels; and workers are terrified of their employers, who force them to sit through anti-union indoctrination sessions or lose their jobs.

CONTINUES…

https://www.commondreams.org/opinion/to-save-us-democracy-tax-the-rich-at-90

Thom Hartmann has a really good idea there. Rich will still be rich, just paying their fair share to maintain the nation that lets them stay rich.

[crud]

1. Thomas Paine

in his writing referred to agrarian justice. Where landowners displace people from growing crops, they should pay a tax to compensate for the displaced people. Maybe when they use their billions to displace our voices in the democracy, they should pay a tax to compensate us for our lost voice. Tie the tax directly to our democracy somehow and political money.

[Kid Berwyn]

2. Very important idea to consider, thanks!

The Roberts Supreme Court equated money and speech in 2010, reversing 234 years of democratic tradition.

If one voice can drown out all the others, not only does democracy not function, it raises the musings of a wealthy tyrant to “the way things are and ought to be.”

[FakeNoose]

3. Another important point was emphasized by Pres. Eisenhower

The Repukes must have agreed with him because he was re-elected to a 2nd term in 1956. And he had the funds to launch America's Interstate Highway system.

For the record, Dwight Eisenhower was the last good Republican President we ever had.

[Kid Berwyn]

7. Yes, Dwight D. Eisenhower was the last good Republican president.

By "good" I mean a man of integrity, the kind any Democrat would be proud to call "My President." Not the treasonous warmongering greedheads who've done all they could to destroy democracy and centralize power and money since Nixon was a veep.

From Kitty Kelly:

Senator Prescott Bush, representing Connecticut, known then as the Hat State, adjusts a straw Panama he gave to Vice President Richard Nixon on May 6, 1953, after a weekly lunch of freshman Republicans in the U.S. Senate. Bush, who favored jaunty brown-and-white spectator shoes and plaid double-breasted blazers, was known as one of the best-dressed men in the Senate.



From Ike:

"Government can do a great deal to aid the settlement of labor disputes without allowing itself to be employed as an ally of either side. Its proper role in industrial strife is to encourage the process of mediation and conciliation." -- State of the Union Message, Washington, DC, 2/2/53

[enid602]

4. Tax

Prior to WWII, only the top 10% of wage earners paid any income taxes. 90% was reserved for people who made over $1MM. That is they paid 90% in income tax, but only on income in excess of $1MM. Such earners were extremely rare during the Depression.

[Kid Berwyn]

8. Important points. Today's top hedge fund managers bring in a coupla billion-plus annually.

The Rich List: The 22nd Annual Ranking of
the Highest-Earning Hedge Fund Managers

It was a bad year for many of the usual suspects — but not for Ken Griffin.

By Stephen Taub
Institutional Investor, March 07, 2023

EXCERPT...

$4.1 Billion
Kenneth Griffin
Citadel

SNIP...

2
$3.2 Billion
Israel (Izzy) Englander
Millennium Management

SNIP...

3
$1.9 Billion
Steven Cohen
Point72 Asset Management

CONTINUES...

https://www.institutionalinvestor.com/article/b8xr0dd2l8t7nc/The-Rich-List-The-22nd-Annual-Ranking-of-the-Highest-Earning-Hedge-Fund-Managers

I don't mind saying it to their faces: 90-percent of a billion would leave them $100 million.

[Bayard]

5. I could live with them paying 50%

I think the difference between now, and then, is the amount of corruption, greed, and single-mindedness in our current politicians. Such laws would never pass now.

[roamer65]

6. I would settle for that, for starters.

The top marginal income tax rate in 1982 was 50 pct.

Just index it for inflation and do it, IMO.

https://www.tax-brackets.org/federaltaxtable/1982

[Kid Berwyn]

9. Half of all they own, yeah.

Otherwise, 90-percent on what they bring in will go a long way toward leveling the playing field. Right now, with the Supreme Court, House and Senate doing what Wall Street and Big Oil want hasn't put a dent in the nation and planet's existential problems. And if the money isn't put to work to solve climate change, infectious diseases, poverty, joblessness, etc., there won't be any rich people around to spend money, if there are any people at all.

[BSdetect]

10. Unless you close the loopholes how can you set a tax rate at 90%?

The super rich (top 1% of the 1%) don't earn much actual "pay"

They are not sitting on piles of cash earning interest.

The only easy way to tax them is perhaps raising the tax on dividends somehow.

I read recently that almost all Americans are in the top 1% on a world wide basis.

I think we would achieve much more by crushing money in politics such as lobbyists.

Then we could start making legislation work for all.

[Kid Berwyn]

11. Agree totally about money in politics. Its influence is undemocratic and unAmerican.

Good points, yours, for about taxation and enacting a fairer tax on the wealthy. This organization points out some ideas and takes a scientific approach:

INSTITUTE ON TAXATION AND ECONOMIC POLICY

MISSION

ITEP is a non-profit, non-partisan tax policy organization. We conduct rigorous analyses of tax and economic proposals and provide data-driven recommendations to shape equitable and sustainable tax systems. ITEP’s expertise and data uniquely enhance federal, state, and local policy debates by revealing how taxes affect people at various levels of income and wealth, and people of different races and ethnicities. We also help make the case for raising enough revenue to truly meet all our societal needs. Our work is designed to provide the best possible information and to put forth a vision of a more racially and economically equitable tax system at all levels of government.

VALUES

Good tax policy is essential to creating a more equitable, inclusive, and sustainable economy in which all people have what they need to thrive. But our tax systems too often fail to raise enough revenue to fund our common priorities, are littered with loopholes for the wealthy and corporate interests, and in the case of most state and local tax systems, ask more of those who have the least. These deeply inequitable policies contribute to stark disparities in wealth and well-being by race, ethnicity, gender, and geography. This results in a society in which a tiny few capture an enormous share of the nation’s income and wealth while a broad swath of people make do without economic security.

ITEP believes that data can make a powerful case for equitable tax policy. We care deeply about real-life impacts of policy choices, appreciate that lived experience can differ from assumptions in academic literature, and respect diverse perspectives. To complement and enhance our research, we strive to provide historical and social context; examine how policy intersects with race, gender, class and other factors; evaluate our data for potential biases; counter biases and inaccuracies in other research; and identify gaps in existing research. We know that creating change requires many different voices and approaches and we are proud to contribute to the struggle for justice.

SOURCE: https://itep.org

Perhaps the answer lies in taxing what was not taxed, thanks to 42 years of Trickle Down Reaganomics.

EXCERPT...

Revenue Potential of Net Worth Taxation

The U.S. is confronting staggering wealth inequality across economic and racial groups.[9] Tax policy at all levels of government—federal, state and local—is falling short of its potential to curb this inequality. A recent analysis by economists at the White House Council of Economic Advisors and the Office of Management and Budget, for example, concluded that the wealthiest 400 families in the nation pay an average federal individual income tax rate of just 8.2 percent when measured against a relatively comprehensive measure of income that includes unrealized capital gains.[10] Recent investigative reporting by ProPublica has uncovered even lower tax rates for many billionaires.[11]

The federal tax system is focused almost entirely on taxing income. It taxes wealth only when it is transferred as a gift or bequest, and such wealth transfer taxes account for a tiny fraction of federal revenue. This is exacerbated by income tax preferences that tend to treat income derived from wealth more favorably than income derived from labor.

There is no shortage of options for addressing this under-taxation of extreme wealth in the U.S. Many specific types of reforms are discussed briefly in the next section.

Perhaps the most direct and intuitive option is to create a nationwide tax on extreme wealth, often referred to as a “net worth tax” or, simply, a “wealth tax.” Applying a 2 percent tax to assets over $30 million per household could have raised more than $414 billion if it were in effect this year. A tax rate of 5 percent could have been expected to yield almost $1 trillion this year. Estimates of how those payments would be distributed across states are provided in Appendix A. These calculations assume a compliance rate of 80 percent, which is slightly lower than the 83.7 percent rate of overall federal tax compliance and the 86 percent rate seen under the estate tax.[12] It is also in line with the compliance rate used by a team of experts who evaluated the revenue potential of a state-level wealth tax in California.[13]

CONTINUES...

https://itep.org/the-geographic-distribution-of-extreme-wealth-in-the-u-s/

Arlington National Cemetery is the final resting place of men and women who gave their lives in service to our country, not our bank accounts.