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Your Take: Would You Welcome a 75% Tax Rate on the Rich?

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MoneyAbout a year ago, some wealthy people in France signed a letter in which they asked for higher taxes. I bet you can guess what happened in the country with 3 million unemployed and a mandatory 35-hour work week… they gave it to them.

France’s President, Francois Hollande, proposed a 75% marginal tax on all income over $1.3 million.

That’s pretty significant… or is it? Is it unprecedented? Let’s put it in historical terms for the US.

By comparison, our current highest tax rate is 35% and it’s on income of above $388,350. So it’s high compared to today.

However, our highest historical tax bracket (courtesy of the Tax Policy Center) was 94% in 1944-45 and that was on income of $200,000+ ($2,559,766.67 in today’s dollars). Interestingly enough, the 75% tax bracket in 1944-5 was $44000-$50000, which is $563,148.67-$639,941.67 in 2012 dollars. you might be surprised to know that the top marginal rate for many many years, from 1936-1980, was in 70% or greater. It was always on very high income (for example, in 1980, the top rate of 70% applied to income of $215,400 and up – the equivalent of $602,228.60 today), but the top rate was still high.

One other interesting consideration… the times when we had the highest tax rates were during times of war. We had both World Wars (the top rate spiked during and after WWI, then fell until WWII), then the Korean War, then Vietnam. Despite being involved in Iraq and Afghanistan, our tax rates have actually fallen significantly.

So, in today’s terms, 75% seems like “a lot.” Historically, compared to the United States, it’s actually not that high after all.

Would you welcome a higher tax rate on the rich? What about one this high?

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58 Responses to “Your Take: Would You Welcome a 75% Tax Rate on the Rich?”

  1. I agree that we should require “rich people” to pay higher tax. However, I think 75% will be too much. The best solution here is to develop better taxation laws and remove the loopholes that rich people and tax cheaters use to reduce their taxes.

  2. Shorebreak says:

    The system is a shambles because those that are at, or near, either income extremes expect the dwindling middle-class earners to carry the taxation burden. It is shameful that the wealthiest and poorest in our society are both heading toward less responsibility for the costs incurred in running this country.

    • Kel says:

      Amen, Shorebreak. Why can people not see that class warfare will, in the end lead to street warfare. Why do the poor hate the rich? If you ask any poor or middle class people, if they want to be rich, they will say yes. That is why they play the lottery (a tax on the poor and middle class). Most rich people are not the evil people they are made out to be. Presidente’ Barry is rich because the kids in certain classes on the college campuses had to read his book. I bet he would find a way around those taxes. Make everyone pay a flat rate. Get rid of the welfare to all but elderly and infirmed and make government live within there means like everyone else. One other comment to sum up my argument. It is not wealth that makes you evil, it is following evil that makes you evil.

    • Beezle says:

      Really? You want the poor to carry more responsibility for the costs in running the country.

  3. Rob says:

    Different tax rates are the most unfair thing I have ever seen. Why should someone making more have to pay more? And I don’t mean just the rate. Everyone, no matter their income should have to pay the same amount of money. For example, I’m not calling for a 20% rate….I’m calling for a $5,000 amount. Obviously that is not the right number but a number that is fair should be created. Everyone should pay that amount and if you cannot, you would have to work at a government facility to help pay for it like some colleges make their students do to offset the cost of tuition.

    It is completely unfair that someone making $200,000 has to pay more in actual dollars than someone making $20,000 when they are not receiving anything more. We all receive the same services that those taxes pay for. The current tax system is like saying someone making more should have to pay more for groceries or more for a movie or for a car. A scaled price on goods is unfair and would never happen so why should the tax system be the same?

    And this is coming from someone who makes $50,000/year! All tax systems are completely unfair and do not make people want to earn more. Why should I work harder to earn more when you are gonna take 75% of it? Even if it was the same rate, why should I have to pay more? I call for the same amount for all citizens.

    • jim says:

      So you want a per capita tax?

      OK right now the US takes in about $2 trillion from individual taxes. That works out to about $6600 per person in taxes. A family of four would owe $26,600 in taxes for mom, dad and the 2 kids. Grandma and grandpa with their $1000 month social security check would owe $13,200. Meanwhile Paris Hilton and Lebron James would each pay $6600 roughly 0.000001 of their incomes.

      Fair?

      If you exclude poor people and give deductions then you end up with a large % of the people not paying taxes and again have a progressive tax. But that would just hurt the middle class at the benefit of the rich.

      You could of course slash spending drastically which would just gut social security, medicare and hobble our military.

      • Rob says:

        Yes it is fair because why should I have to pay more just because I earn more?? Am I getting anything extra for it? If you want that to be the case, then why not make rich people pay more for a car and make me pay less for it because I earn less? Or let me pay 50 cents for my Starbucks coffee while making rich people pay $10 for theirs. Fair? No, didn’t think so.

        Your reasoning is completely unsound and unfair. Do elderly people pay taxes now? No, so they wouldn’t have to in that system. Same with children. Taxes pay for services. We all receive the same services so we should all pay the same. If I want to receive extra services, then I should pay extra….simple as that. Example, I go get a car wash. If I want a regular wash, I pay $15. If I want detailing or some extras, I pay more but we all pay the same amount! Another example, I pay a certain amount for a doctor and I get certain services. If I want more checkups or more scans or whatever, I pay extra. Simple and fair! Unlike the tax system!

      • Rob says:

        Forgot to add…

        Just because it is roughly 0.000001 of their incomes is not a sound argument. They worked hard to get it or inherit or whatever. That was the card they were dealt and they shouldn’t have to pay more just because they have more. Children below 18 and those of senior age of 65 don’t pay taxes (unless they work) so they won’t in a new system.

        Just because the amount will be more percentage wise of someone’s income that makes $50,000 vs. $500,000 is not the way to look at things. They worked to get that money and everyone can do what they did. We need to stop whining and work hard and get our entrepreneurial spirit back. Taxing the rich more will kill that entrepreneurial spirit and make people not want to work hard since the incentive is gone. That will push innovation to other countries and will push our country further behind!

        • NateUVM says:

          Because someone needs to pay to protect/preserve the system that is providing for your ability to benefit as an entrepreneur.

          Unfortunately, taxing everyone only what the poorest can afford to pay, so that everyone is paying the same amount, does not provide enough revenue to cover that cost. As such, people who make more, need to be asked to pay more. The question, then, is simply, “how much more?”

          To suggest that everyone should pay the same amount, no matter what they/we make, is to suggest you are not serious about discussing the issue.

          Forgot to add… The income that we are asking the “rich” to pay more from… That’s not “earned” income… It’s investment income. So, to suggest they worked hard for it…? Well, maybe the initial investment, but certainly not what they are being taxed on now.

          Rob, what, exactly IS your economic background?

          • Rob says:

            If you read what I wrote fully, you would see that I do not expect to tax everyone only what the poor can pay. There should be an amount that is agreed upon and those who cannot afford it, should have to work in a government facility to offset those costs. This is similar to many college programs who allow tuition costs to be offset by those working for the university.

            Also, if you had read what I wrote fully, you would have seen that I wrote I make $50,000/year in the NYC metro area. So it is a decent salary for anywhere but here because this is one of the highest real estate markets in the country. Do you hear me whining?? Nope. You get what you work for. And so what if someone inherited money or invested in it? That’s the card they were dealt and stop being jealous and try to take from them. Why don’t we have everyone just pay different prices for everything then? Go to a restaurant and someone pays $50 for their meal and I’ll pay $15 just because I make less. That is exactly what is happening with taxes and it is utterly stupid.

            And your notion that “someone needs to pay to protect/preserve the system that is providing for your ability to benefit as an entrepreneur” is even more nonsensical because yes it is does need to be paid for but why should the rich worry about you? Who are you to them? Should you have to pay for all the people who don’t work but collect welfare?? No! They get by on making money and even getting extra money for each kid they have while you slave away. Who are they to you? No one. This is not a country founded on hand holding. Everyone needs to grow up and take responsibility for their actions.

        • freeby50 says:

          OK so if the children and seniors don’t have to pay that raises the per capita bill to about $10,000.

          So a family of four making $50,000 would have a $20,000 tax bill or 40% effective tax rage.

          And a 67 year old senior citizen making $100k from their job would pay $0 in taxes?

          And we’d throw poor people in government work camps.

          Awesome.

  4. Rob says:

    I didn’t say just because they were seniors. Try reading everything before making dumb comments! I said those who work (just as today) even if they are under 18 or over 65 will get taxed. The amount to pay can be set at some number…whatever that may be. The point is that why should someone have to pay more for something when not getting more in return?

    I don’t know how much you all make but why don’t we turn the whole economy onto a pay/scale basis then? You pay based on how much you make. Like they do traffic tickets in Finland. Those who make more pay more as one unlucky rich person found out:

    http://www.trafficticketsecrets.com/speeding-ticket-news-finnish.html

    That to me is unfair and if you don’t think so, then you should go live in a socialist country. This is a capitalist country and it was developed on the sweat of hard working individuals that were incentivized to do so. Take that away and you take away the very fabric of what makes this country great. Becoming a socialist nation is not the way to go but unfortunately, it is the way we have been heading since the 1940s.

  5. Rob says:

    And there not government work camps. If you cannot pay, you would work at a government JOB to offset the cost just as many students do in colleges across the country. It is unfair that the poor take welfare money from people like me because they do not work. There are tons of jobs out there. Maybe ones you don’t want to do like a janitor or working at McDonalds but they are there and it’s something.

    • Noob says:

      Agree and disagree. Same flat % Rate for everyone. NOT a set amount like $6000. Just 20% rate for everyone, no deduction!!!

    • Anonymous says:

      So poor people have to work two jobs? One to pay the bills and one to pay for their tax debt? So a poor person would have to put in double hours and a rich person can live off interest income? That’s your idea of fairness?

  6. Anonymous says:

    Everyone needs to pay more taxes Period. Poor people need Skin in the game, A poor person in America is defined by less than 25k a year.

    Those people largely pay ZERO federal income tax. That needs to stop. Loop holes and kick backs for the Rich need to stop.

    Everyone has to feel the pain of taxes, EVERYONE. It makes people understand the issues and vote accordingly. It makes people educate themselves cause they get sick and tired of getting hit were it counts….The Pocket book.

    Right now the RICH and POOR benefit greatly from the system… And virtually pay nothing into it. That is Crushing this Country, and the Middle class.

  7. ray says:

    Time to end production-punative income tax and implement a consumption-punstive tax (Ala fairtax.org). It rewards thrift and discourages gluttony.


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