Why a Progressive Income Tax Makes Sense

[LiberalFighter]

I thought I would post this to provide ammo to fight the blow hards.


Why a Progressive Income Tax Makes Sense

When arguing the merits of a progressive income tax, don’t take the usual approach that “the rich can afford it,” or that “it won’t hurt them as much.”

Rush Limbaugh and his conservative cohorts love to attack reasons like these. Instead, point out that our richest citizens have benefited most from the policies that right wing extremists have been implementing for the past 15 years. The wealthy caused these policies and they benefit the most from them.

Especially since the ’80s began, conservative politicians have made corporations more profitable, they’ve increased the wealth of the already wealthy, and they’ve forced huge sacrifices on middle and low income Americans. They accomplished this by:
• Forcing workers to compete with the most brutalized workers in the world,
• Loading the courts with Republican lawyers,
• Manipulating the prime rate, and by
• Passing all kinds of anti-worker legislation.

It is only fair that those who caused these conditions, and benefited from them (by getting America’s right wing extremists elected), pay their fair share of the costs that they generated.

A second argument for the progressive tax
Never in recent history has greed been so richly rewarded. Between 1942 and 1962, the tax rate for our richest Americans was at least 88%, and as high as 91%.

In those days, when CEOs considered firing thousands of workers for a million dollar bonus, the moral condemnation didn’t seem to be worth it. After taxes, it only amounted to, say, only $120,000. Today, when a CEO fires thousands of workers, he gets a two million dollar bonus, and he gets to keep a million of it. Suddenly, we’re talking serious money. And when he retires he can move to one of our country’s many guarded communities with his millionaire cronies, and he gets virtually no moral condemnation from his golfing buddies.

So, let’s go back to the tax rates we had for our richest citizens between 1942 and 1962. Or, at least, we could go to the rates we had from 1962 to 1982, when it was at least 70%.

And by the way, over that period of forty years between ’42 and ’82, none of the bad things that conservatives warn about happened. We didn’t have massive unemployment, we didn’t stifle innovation, and, above all, we didn’t become communists.


This was originally posted at the below website. It is no longer active.
http://web.cetlink.net/~kellycm/progtax.html

[Lucky Luciano]

1. A progressive rate is ok...but 70%???

Man...that would be more than I could tolerate. I would say that we should cut military spending first. My girlfriend is from Japan and the highest tax rates there are in the low 20s and she feels ripped off here in the US because she is paying for military wars etc. Japan has health care too and very low unemployment and poverty.

[Median Democrat]

2. Japan Has A VAT Tax, Residence Tax, Higher Corporate Tax...

...and they tax capital gains like income. Finally, the top income tax bracket in Japan is 40%, which is higher than the 39.6% proposed by Obama.

[DrToast]

7. Japan has a lot of problems with income inequality, too

Also, the tax rates of 70% would apply to extremely high incomes.

[MADem]

8. Hell, wasn't it up around ninety when JFK was in office?

Those deductions were vital to keeping any dough if one was rich.

[MannyGoldstein]

20. 91% Top Tax Rate Under Eisenhower

But, including the lower capital gains tax, total tax burden on the wealthiest Americans was about 50%, vs. 18% now,

[MADem]

9. She wasn't a high wage earner, then--as others have noted. nt

[Political Heretic]

10. I think its important to keep pointing out that for most of the 20th century it was higher than 70%

I didn't know that for a long time. I don't think many people realized that.

Will we go back to those times? No, I don't think we'll ever have a tax rate that high on anyone again. But many things worked better when we did, including having less polarizing income and wealth disparity in society.

Income and wealth disparity is bad not for some "moral value" reason. It's bad because wealth concentrated at the top of a system with a huge polarization between rich and poor leads to systematic collapse as the system becomes too top heavy to sustain itself.

[MannyGoldstein]

3. Current Tax Rates Are Hyper-regressive

Because of capital gains tax of 15% and Social Security being treated as plain old income by the feds:

1. The wealthiest Americans pay 18% in federal taxes
2. A median wage earner pays more than 30% in federal taxes

That's totally fucked. And I don't expect that Obama's team of Reagan Republicans will work to change that.

[LiberalFighter]

4. I disagree that median wage earners pay more than 30% in federal taxes.

How do you come up with that figure?

[MannyGoldstein]

5. Add Federal Income Tax Plus Social Security

Warren Buffet found the same thing: http://taxprof.typepad.com/taxprof_blog/2007/06/warren-buffet-p.html

[hay rick]

11. Plus

property taxes, sales taxes, state income taxes, etc.

[MannyGoldstein]

12. If All That Is Added, The Median American Pays 50% Or So

I don't know what it is for the wealthiest Americans, although you can be sure that it's no more than 47%, and that's before hiding money offshore.

[LiberalFighter]

13. I still dispute that. I pay 8-10 percent not including SSI

With SSI and Medicare it should be less than 17.5

[MannyGoldstein]

14. Do You Earn A Median Wage?

Probably $30k-$35k these days.

[LiberalFighter]

16. Yep

And I'm single. I only receive 1 exemption worth $3500 and $5450 for standard deduction.

[MannyGoldstein]

19. So Warren Buffet Is Wrong Too?

Something's not making sense here.

[LiberalFighter]

21. Something don't add up. The question is what are the figures being used?

Not something in general.

[LiberalFighter]

17. I don't know where you get your facts but they are probably very flawed.

Tax Foundation Figures Do Not Represent Typical Households’ Tax Burdens
Figures May Mislead Policymakers, Journalists, and the Public
Article

You do know that the total amount of your income is not all taxed at one rate?

[depakid]

6. Declining marginal utility

The foundation for modern economics- and the rational basis for progressive vs. regressive taxation.

[SanchoPanza]

18. People need to sleep less in Econ 101

I have too many friends with MBAs who know absolutely fuck-all about macroeconomics, which is part of a long-standing trend that has allowed supply-side alchemy to dominate virtually an entire political party.

[Honeycombe8]

15. I don't think that calling them greedy and, indirectly, criminals, will have a positive effect.

Would that work on YOU?

No, the reasons we give for the progressive tax is the reason you stated at the beginning. That IS the reason. Facts are facts, after all.

The fact is: On a monetary curve, $10 is worth less to someone who earns $100,000 a year than it is to someone who earns $20,000 a year. 5% of $20,000 is worth MORE to that wage earner than 5% of $100,000 is to that wage earner, because at the $20K level, all monies go toward necessities, while the $100K earner has expendable income (theoretically). Also, there is the philosophy that those who have benefited most by our capitalistic system (which is a good system), have more to be thankful for, and therefore, should pay a tad more in taxes, percentage-wise.