If you really want to tax the rich, 3 taxes would be effective from that standpoint. The capital gains tax, the estate tax and a wealth tax.
Yes, they all sound good to me.
Arlen Grossman, what is a reasonable rate for all 3 without being too confiscatory in any regard?
Ragnar, I don’t have numbers in mind, but I go back to the original post, which reminds us that when taxes on the wealthy were higher, our economy was buzzing along very nicely. But when Reagan and the GOP lowered taxes on the rich, inequality increased and the economy wasn’t doing so well. The exact numbers we need for tax rates are negotiable, but the concept appears solid.
Quite honestly, I do not believe the tax rate should exceed 25%. If you sell an estate, you pay 25% on any income from the sale. Should you get your money from capital gains, you pay a rate of 25%. A wealth tax at 25% may sound extreme to many people, however, that should not eliminate incentives to create wealth in my opinion. What are your views?
Jeffrey, I understand you don’t like your taxes used for Planned Parenthood, etc. I don’t like taxes being spent on unnecessary weapon systems and nuclear weapons, and on tax subsidies for wealthy corporations. So we’re even 🙂
Arlen Grossman, without rich people, where will the jobs be found?
Arlen Grossman, a big problem with the tax the rich theory is that many rich people (not all) would just take their wealth and send it to the Cayman Islands and/or other tax havens. We agree that income and wealth inequality are problematic. Despite the way his voice sounds to me when he talks, consumer advocate Clark Howard has a lot of things worth listening to.
Jeffrey, maybe we can make laws that prohibit the rich from using offshore tax havens. I’ve heard Clark Howard before and he seems reasonable, though I haven’t heard him recently.
Arlen Grossman, the issue of the tax the rich crowd is that their arguments are based on envy and entitlement. The exception is when Bill Gates, George Soros, Warren Buffett and other people like them who are very wealthy say that they are not taxed enough. here are 2 videos for you: 1: https://www.youtube.com/watch?v=nrXiSlqb8Co, 2: https://www.youtube.com/watch?v=M0MP2TnEPzA Watch them and then give me feedback at your convenience.
I saw the videos and thought they made good sense and (unless I’m missing something) seem to side with my views more than yours, Jeffrey. What do you think?
Arlen Grossman, I will not dispute that. In the first video, the guy speaks of a 0% tax rate and a 100% tax rate. Yes, I do know what marginal tax rates are. My problem with the tax the rich logic is that if we cannot all be equally rich, those on the Left seem to believe that we should be equally poor. The 2nd video has 2 very wealthy people, Bill Gates and Warren Buffett who say that they believe they should be taxed more. Given the fact that many of our tax dollars subsidize organizations like Planned Parenthood, welfare for drug addicts and people who cross over the border from Mexico illegally and drop their children and bestow citizenship on them which was not legitimately earned, that galls me to no end. Warren Buffett said he objected to a flat tax because he said it was too flat for his liking. Even with a flat percentage, how exactly are he and Bill Gates not paying more in dollar amount?
Arlen Grossman, the tax the rich theory sounds good in practice. In reality, a rate that is higher than 50% is unreasonable.
Unfortunately, Jeffrey, WordPress makes it difficult to find a specific letter, because instead of the date, it says something like “19 days ago.” If you think it important enough, give me specific opening words and I’ll try to focus in on the correct email.
Arlen Grossman, I cannot recall what post I made the comment on. There was one post that had 2 sentences, 1 advocating a flat tax of 15%, the other a flat rate of 17%. The 15% part was the correct one. The 17% was in error.
I just realized a mistake in my March 23rd comment. One sentence had 17% where I meant to put 15%. So the contradiction was unintentional.
Well, Jeffrey, you have it on record here. For me to locate it would probably take too much time.
Arlen Grossman, that being the case, don’t give it too much thought. What I had meant at the time was having a flat tax at 15%. Capital Gains would be taxed between 15%-25%.
I hear you.
Arlen Grossman, varying the rate on Capital Gains would not discourage investment in my opinion. It just depends on how long it is held.
Those are reasonable suggestions, although I would tax the very wealthy at a higher rate.
Arlen Grossman, if you were to have a sliding scale from the standpoint of Capital Gains taxation, what rates would you choose for short term and long term Capital Gains? I would vary the rates based on how long they are held, however, I would keep the rates reasonable in order to encourage investment.
Sorry, Jeffrey, I haven’t given that enough thought to suggest rates. But in general, income inequality is such that I’d like the rich to pay progressively more to better level the playing field.
Arlen Grossman, in a sense that is what my idea does. The marginal rate, with very limited deductions, would be a simple flat tax of 15%. Capital Gains would be taxed between 15% and 25%. The longer the gain is held, the lower the tax rate. The shorter length of time sees the gain taxed at the higher rate. The top marginal tax rate would be 15%. You would be able to deduct childcare expenses, home mortgage interest, business purchases, educational expenses and charitable contributions. There would be no deductibility for state or local taxes. However, since everyone would get more take home pay, that makes up the difference to compensate for the loss of some degree of tax deductible expenditures. You and I have a differing idea about how to tax the wealthy. My idea still ensures that wealthy people will pay the lion’s share of the nation’s tax burden. Even with a flat marginal tax rate, you still technically pay nothing below a certain income threshold. An example: if you earn $50, 000.00 a year or less, you pay nothing. Not even payroll taxes, which is a big advantage for low income families. If you earn $57, 000.00 a year or more, you pay 15%.
You’ve obviously given this a lot of thought, Jeffrey, and your ideas basically sound reasonable to me. However, I would like to see the top marginal tax rate higher.
Nobody really pays the 90% because of all of the tax deductions. A fairer system would be a simple flat tax or a consumption tax. If we have a flat tax, unless you don’t make enough to pay federal income tax, I would advocate a simple flat tax of 15%. Capital Gains would be taxed on a sliding scale. Short term capital gains would be subject to a flat rate of 15%. Long term capital gains would be taxed at 25%.
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