Greetings from computer hell – but that’s another story.
A recent Molly Ivins column I referred you to knocked guys for trying to avoid tax on their $100 million stock option windfalls. What’s so wrong with having to pay $40 million in tax on a $100 million in income, it asked.
Answered Gennady S, with some heat: ‘The guy who made $100 million took a lot more chances than the guy who did not, and if his risks are not rewarded, capitalism would not work. Period.’
–> Yet I would argue that somehow capitalism worked in the 1950s, when the top federal income tax bracket was (a ridiculous) 90%. And worked rather well in the 60s and 70s when it was (a still ridiculous) 70%. And from 1980 through 1986 when it was 50%. (Still too high, in my view).
Lowering the top rate all the way to 28% in 1986 did not lead to any kind of boom in the Reagan/Bush years, only to an explosion of debt for future generations to service. Indeed, the economy was in a pretty bad rut by 1991-92.
Did notching the top rate back up to 39.6% in 1993 kill the economy? Did it shut off access to capital and discourage risk taking? Quite the contrary; over the next eight years we added 22 million new jobs, capital was plentiful, and risk takers were going wild.
The evidence would seem to suggest that taxing $100 million windfalls at 39.6% does not kill capitalism (or lottery ticket sales). Neither does taxing $100 million estates. Neither, even, does taxing dividends and capital gains.
We would all love to live in a world where, per Leona Helmsley, only the little people paid taxes. But our need for revenue is too great. For the foreseeable future, sadly, the super-rich will have to pay taxes, too. At least that is the Democratic view.
Quote of the Day
If a man is called to be a streetsweeper, he should sweep streets even as Michelangelo painted or Beethoven composed music or Shakespeare wrote poetry. He should sweep streets so well that all the hosts of heaven and earth will pause to say, 'Here lived a great streetsweeper who did his job well.'~Martin Luther King, Jr.
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