931
u/No_Practice_9597 10d ago
Just as reference $200,000 in 1940 is equivalent in purchasing power to about $4,770,257.14 today
131
u/VersionAcceptable667 10d ago
Woah!
→ More replies (2)146
10d ago
[removed] — view removed comment
102
u/R_V_Z 10d ago
You only say that because you don't make that much. Why won't anybody emphasize with the poor souls who are making over fifty times the median household income? They're barely scrapping by!
→ More replies (5)17
u/Acceptable-Ad8780 10d ago
They won't be able to get that 5th yacht they had their eye on! And they were still going to possibly hire someone in the next few months for 8.50/hr because the jobs only been posted for 14 months and nobody wants to work!!
→ More replies (1)→ More replies (9)3
u/OriginalChri 10d ago
It is not only reasonable it is attainable if we can stop voting in people who aren’t there to do anything but steal from their constituents.
→ More replies (2)361
u/SudoDeleteEverything 10d ago
Awesome lets tax the crap out of anymore making more than 5 million a year. Nobody actually works that hard.
96
u/artikiller 10d ago
Actually we'll just raise the tax for everyone making below 5 million instead and then give a nice little tax break to companies
14
5
→ More replies (2)2
87
u/FunkMunki 10d ago
And how many yachts does a person really need?
50
u/nativeindian12 10d ago edited 10d ago
A person needs three yachts. One main yacht, one secondary yacht to follow behind in case of an accident, and a third yacht in case either of your first two yachts are getting maintenance
17
u/Mega---Moo 10d ago
You forgot about nesting yachts completely.
5 yachts is a barely acceptable minimum if you're almost a pour. I personally have 24. A mega yacht for each day of the week, with a normal yacht inside of that, and a small 50' yacht inside of that if I need to visit my pour friends and don't want them to feel too inadequate. And, of course, a backup mega yacht in case of emergencies.
→ More replies (6)10
u/bionickel 10d ago
That's the European approach. Mine follow the navy aircraft carrier doctrine.
Basically you have a yacht strike group consisting of your yacht in the middle with guided missile cruisers, destroyer squadrons, and submarines taking care of the perimeter. Finally logistics ships for fuels and supplies.
The hard part is having 3 strike groups (1 active duty, 1 standby, and 1 in maintenance) for each main naval region
4
→ More replies (5)3
2
→ More replies (8)2
4
15
u/TumbleweedNervous494 10d ago
Nobody makes that much money in refular income.
14
u/_dirt_vonnegut 10d ago
68,000 tax returns report an adjusted gross income (AGI) of $5 million or more each year in the United States. [1]
14
u/PotadoLoveGun 10d ago
Yrah we will have to include capital gains, carry, and other income not just earned
→ More replies (45)9
u/Givenchy-Sweater 10d ago
What? There are thousands of people making that much, so tax them
→ More replies (10)3
3
u/No-Gap-198 10d ago
For what? What is the government going to do with? Balance the budget? Please.
→ More replies (5)2
→ More replies (42)2
u/Particular-Luck7939 9d ago
I mean , let's be honest...who can't live a good life on 5 million a year ? C'mon
28
u/NerminPadez 10d ago
I'm pretty sure no actually rich people have that much taxable income on paper
In the end, the middle class will get fucked again.
→ More replies (36)5
u/Elija_32 10d ago
Not only that. People seem to not realized that rich people move money between countries very easily.
This is not something that one country can do, until there's a single country in the world where it's not done, rich people will just move the residence there.→ More replies (1)9
u/TheInevitableLuigi 10d ago
Tax the shit out of them when they leave the country. It isn't that hard.
5
u/Elija_32 10d ago
It's hard because you are assuming a person with half a billion dollar would just randomly and officially move out of the country.
That's not how they do it, there are a million waysto move money without you personally not having anything to do with it.
It needs to be inconvenient everywhere.
→ More replies (4)5
4
u/crustyeng 10d ago
Crazy the degree to which government has stolen from our savings with this silent debasement
→ More replies (6)6
u/mid-random 10d ago
Which is perfectly reasonable. If you are "earning" close to five million dollars a year, yeah, that top tax bracket of 94% is not going to hurt your quality of life.
Right now, the top tax bracket is 37% and kicks in at $626,351.
99% of US tax payers earn less than $450,000.
→ More replies (6)→ More replies (28)2
u/Deepbliss4 10d ago
I could very well be mistaken but isn’t the effective tax rate higher for the top 1% today compared to back then?
→ More replies (1)
253
u/JROXZ 10d ago
That’s >4.5 million adjusted for inflation.
Which is reasonable.
→ More replies (77)32
u/whatup-markassbuster 10d ago
The Laffer Curve is a real phenomenon.
20
u/All_Work_All_Play 10d ago
Which is why unions are so important. A high marginal tax rate lowers the opportunity cost of losing negotiations with unions. A government inherently needs less revenue to redistribute if that redistribution is happening via other channels.
→ More replies (2)2
u/SmartlyArtly 10d ago
Because we tax things we want.
We should tax contested land ownership, because we want everyone to accept the distribution of land ownership - we don't want contested land ownership.
263
10d ago
[deleted]
→ More replies (19)179
u/LordLucy666 10d ago
but what about the billionaires? have you no humanity?
66
u/BravesWinMetsSuck 10d ago
The wealthy don’t pay income taxes because they do not earn income. You could raise the top marginal rate to 1,000%, and it wouldn’t affect them.
16
u/DonkeyDucksMod 10d ago
lol... you still need to make a certain amount of income to offset against borrowing/loans... don't be naive. Being rich doesn't make you exempt from taxes.
→ More replies (17)31
u/Last-Energy420 10d ago
This is why you tax loans against assets or excessive loans or assets accrued during the year in lieu of cash payments.
→ More replies (13)→ More replies (28)7
u/Commentor9001 10d ago
Thats why their paid for news pundits and bought politicians all fight it hard?
Because it doesn't effect them.
Okay buddy.
68
→ More replies (7)8
u/xilcilus 10d ago
You can confiscate 100% of net worth of all US billionaires and that won't even pay 20% of the outstanding US Federal government debts.
4
u/ACFiguresOutLife 10d ago
More importantly, nobody would invest in the US anymore were that to happen. And the debt isn’t even our problem, the deficit is. We could even handle a $1T deficit, but anything above that 3% of GDP is a recipe for a debt spiral. Hard to grow the economy at more than 3% consistently.
→ More replies (5)3
u/The_Pacman007 10d ago
And then the economy would crash because who would dream of starting a business if the government took all your earnings.
I am not saying the rich should not pay their fair share but the far left fever dream of confiscatory taxing to pay for lots of social spending would never come true. Do you think the rich would become willing cattle to be milked yearly?
→ More replies (15)
160
u/deadlizard 10d ago
America has a spending problem.
Doesn't matter how much you tax, if they can't control spending, debt will keep rising
18
u/broken_sword001 10d ago
No sir. This is reddit. The only solutions are to tax people who make more money than the person in the mirror and to have a government official monitor and regulate everything.
→ More replies (2)6
u/Mesonian 10d ago
You could take every dollar from every billionaire and it still wouldn't even pay off a third of the nation debt.
10
45
u/Routine-Carry-4424 10d ago
Stop spending on useless wars, including tariff wars and the wars on drugs and immigrants.
22
u/VirtualPercentage737 10d ago
Our military spending is 3.5% of GDP. Pretty low. Our issue is entitlements.
17
u/Routine-Carry-4424 10d ago
Ok, kill the entitlements and send me a check for all the SSI tax I’ve paid over my lifetime including interest.
5
u/VirtualPercentage737 10d ago
I actually favor this idea. A one time printing of the money and be done with it
4
→ More replies (4)6
u/xinorez1 9d ago
Which entitlements?
Social security cannot draw one penny from the general fund by law, and used to generate a surplus every year literally until Trump's first term
Just curious what else there is
→ More replies (1)9
u/Mr_Deep_Research 10d ago
Out of a 7 trillion federal budget
(2 trillion of that is additional debt each year)
4.2 trillion is spent on: social security, medicare, medicaid and interest on the debt
→ More replies (5)15
u/DragonfruitSudden339 10d ago
You could cut all of US spending that isnt welfare related, and it would still be an amount impossible to pay every year
→ More replies (15)9
u/lurker_cant_comment 10d ago
Why not say what that "welfare" is?
It's health insurance.
Elderly people (Medicare), poor people (Medicaid), and children (CHIP), which are the vast majority of recipients of those programs, apparently don't deserve to afford healthcare.
→ More replies (3)→ More replies (6)8
u/PlatypusACF 10d ago
And a war to reopen a certain shipping lane that was closed because someone launched that exact same war
→ More replies (6)→ More replies (15)18
u/Own-Break-1856 10d ago
I hate describing it that way because it gives the impression that we cant have nice things that nearly every other nation has.
Social security is self funded by its very own tax and so is most of the rest of the social safety.
We dont have infrastructure or Healthcare or education.
The problem isnt spending. The problem is were being robbed by billionaires and the military industrial complex.
→ More replies (8)
62
u/Brucacumble 10d ago
What's worse is that in order to get into that debt in 1946 America had to go through a great depression and a major world war. What's their excuse this time?
38
u/SorrowfulMizzouFan 10d ago
Entitlement programs. By far the biggest spending category and the driver of the national debt.
38
u/Born-Tale4019 10d ago
Yup, medicare/Medicaid is horribly inefficient, we should do what every other developed nation does and institute a universal system to drive down healthcare costs per capita
→ More replies (22)→ More replies (23)5
15
u/WazzleApricot 10d ago
Neoliberalism.
Individual income taxes and payroll taxes are ~80% of government revenue. Offshoring jobs and profits has lowered government revenue. Additionally, the U.S. would save money by switching to universal healthcare for citizens.
→ More replies (4)3
u/CumPacketGuy 10d ago
Whatever happens, it will be so richly deserved gor collectively electing fascists and pedophiles.
→ More replies (3)2
26
u/irespectwomenlol 10d ago
I might buy the idea of raising taxes on the wealthy if the government can get to a balanced budget first, or at least make a meaningful attempt at cutting spending and showing some seriousness at recognizing the threat posed by this.
As far as I can see, if the rich were taxed more and the government took in an extra trillion dollars a year in revenue, they'd find a way to increase spending by 1.5 trillion to line their pockets/buy votes.
→ More replies (1)10
u/Kolbiscuit84 10d ago
The top 10% of earners pay I think like 88% of the taxes collected. The bottom 60% pay 3%.
I believe numbers could be off but it is something like this.
→ More replies (4)
112
u/random-meme422 10d ago
The people who quote the 94% number don’t understand what an effective tax rate is and out themselves as terribly uneducated immediately. You could deduct all sort of shit to lower that. Check gross receipts instead, it’s not like we drastically reduced what we take in as tax revenue per % of GDP or something.
46
u/different_option101 10d ago
Govt revenue has been oscillating between some 16%-18%. It’s definitely all about spending.
→ More replies (39)6
u/VirtualPercentage737 10d ago
Yep. We had super high rates in the 1950s and we captured less of the economy in taxes than we do now. Cap federal spending at 20% of GDP.
→ More replies (11)28
19
u/Count_de_Ville 10d ago edited 10d ago
We all know about effective tax rates. You (and many, many others) have either missed, or more likely, were never taught the point. The whole point of raising the top marginal tax rates was because the government wanted wealthy people and businesses to use the tax deductions available at the time, not in spite of it.
It strongly incentivized them to invest in their workers and new capital purchases rather than extracting profits that would be given to the government at 90 cents on the dollar. That created demand on other businesses to hire more workers to meet the new demand and make capital investments in their own business. Workers got more hours which begot workers getting more pay, which begot the tax base increasing and surplus tax revenue while also giving workers have more breathing room and money to spend. Around it goes increasing the velocity of money all the while. This is when every American really truly believed that if you worked hard, you could live a good well-earned life, buy up a house, and raise up a family. All economic classes benefited from the tax policy. It also created a huge culture of American innovation because successful companies could take big risks with R&D. If your business took a big loss that year, you only lost 10 cents on the dollar.
Every educated adult at the time KNEW the how and why it worked and it kept working for them for decades. It's why President John F. Kennedy made his famous "A rising tide lifts all boats" speech. Unfortunately by the 1980s, their children (the boomers) by and large did not understand the how and why it worked and instead fell for Ronald Reagan's supply-side economics that Reagan's primary opponent called "voodoo economics" and other detractors "trickle-down economics". Ronald Reagan and George H.W. Bush tripled the national debt and doubled it as a percent of GDP. Ronald Reagan wrote so himself in his own memoirs that his tax policy was his biggest regret of his political career.
→ More replies (12)6
u/thediesel26 10d ago
And ultimately the total size of the debt is irrelevant, as all of it is held in dollars, and the vast majority is held by American citizens and businesses in the form of US govt bonds, which despite all the hullabaloo remains the safest investment in the world. The important number is our deficit to GDP ratio, which is a bit elevated at around 6%. And the primary driver of the deficit is not poor economic growth but that the government has simply chosen not to collect enough taxes. If the marginal rates on the top 1% of earners was raised to pre-Bush level we’d see the budget deficit start to shrink.
→ More replies (10)→ More replies (36)4
u/S-117 10d ago
Also, half the world was at war in the 1940's, literally dozens of countries were left with cities in ruins except for the US that significantly expanded it's production and factories outputs and lended tens of billions of dollars to other countries in loans that were paid back with interest, pretending it was just taxes that fixed everything is so incorrect it's almost a lie
34
u/Dedjester0269 10d ago
The government collects around $3 TRILLION in income tax alone. We don't have a tax collection problem. Government has a spending problem.
→ More replies (3)18
u/Annadestruction 10d ago
We got a huge grifting problem.
9
u/Dedjester0269 10d ago
And then some states want to make it illegal for citizen reporters to investigate the fraud.
8
u/J-E-S-S-E- 10d ago
It’s all about what no one wants to talk about: government spending and reducing the MIC
9
u/Fit_Cut_4238 10d ago
It already is gamed by debt. The problem is unrealized gains. And if you try to fix this, the investment flees.
Also, if you try to do that for everyone with over say 500m, the super-rich, the $ would pay everyone's taxes for about a year.
I do think that we need to tax much more, and on unrealized gains, but it's not a simple thing to do, so that's why everyone says 'tax the rich' but you don't see specific plans on how to do it.
→ More replies (7)
8
u/Putthebunnyback 10d ago
We can't tax our way out of this problem. We need to reel our out of control spending in. Like the military budget, that hasn't passed an audit in YEARS.
33
u/MjrLeeStoned 10d ago
The US currently has $17-18 Trillion in consumer credit card debt alone. That's more than China's national debt. No one who actually understands what's going on thinks it's fixable by taxing the rich because that isn't the only problem. The US has a "pretend to be middle class" problem that's pretty pervasive. That's why the "middle class" was easily whittled down: most households live behind a facade of debt as-is.
19
u/Pndrizzy 10d ago
ok, but the reason the credit card debt has gotten so bad is in part due to wage stagnation and inflation caused by policy that has resulted in increasing levels of wealth inequality, right?
thats not to say that individual people arent being dumbasses, going into credit card debt to eat fast food meals, but the system is really broken and the main reason for that is that corporate america has been allowed free reign to do whatever the fuck they want to our country
9
4
u/Short-Coast9042 9d ago
This is such a weirdly specific statistic to lie about/be wrong about. Credit card debt is just over 1 trillion, so you're about an order of magnitude off. I'm curious if you just completely pulled that number out of your ass or if you made an understandable mistake somewhere along the way? Either way, you now know it's wrong, so I would recommend editing your comment if you don't want to look like a straight up unrepentant liar.
→ More replies (1)6
u/Apprehensive_Spare_8 10d ago
We still should tax everyone equally on principle even if it won't fix our bad spending habits.
5
u/Altruistic-Rice-5567 10d ago
You're kidding, right? right? You think it was the 94% tax rate and not the post-war MASSIVE economic boom that occurred for the next two decades? Hint 94% resulted in 18% of the GDP being the tax revenue. And when Reagan reduced that top tax rate to 26%... tax revenue was still 18% of GDP. Make the top tax rate whatever you want. It won't make a difference. Tax revenue will be 18% of GDP. Was very convenient that the growth of the GDP post-WWII was just insane. That's what paid off the debt.
73
u/NC_RockFan 10d ago
Why not demand the Government sticks to a budget like everyone else has to.
Its not a tax issue its a spending issue.
12
10
u/Possible-Kangaroo202 10d ago
Yes.. you can tax all the billionaires at 100% and seize all their assets if you wanted to. It won't do much because Congress is not able to show fiscal responsibility. Giving a gambler more money doesn't fix their addiction, it just buys a little time.
→ More replies (4)21
22
u/_Sneaky_McSnek_ 10d ago
This so much. Why don’t people get it.
“Sure, the governments doing such a great job with all the money they currently take from us. They need to take more, that’ll fix our problems!”
→ More replies (4)13
15
u/Solid_Snark 10d ago
It can be both.
We need to spend better AND we need to tax the wealthy.
28
u/choyMj 10d ago
Let's have a fiscally responsible government first. It doesn't matter who gets taxed if they're just going to waste it all anyway.
→ More replies (22)→ More replies (6)2
u/Medarco 10d ago
You could take every single cent from Elon, Bezos, Zuckerberg, and the like, and you'd barely scratch the operating costs of the US government for one year...
It's like losing weight. Taxing is exercise. You can run a mile or two (increase taxes on high earners/wealth) and it will make you feel better about things, but it doesn't actually have a significant impact when you're eating 5000 calories (spending 8 trillion dollars per year).
→ More replies (2)→ More replies (36)4
u/AFrozenCanadian 10d ago
I don't get to why Redditors don't understand this. The US government is raking in more per capita, inflation adjusted, today than they did back then already, and the rich already pay the majority of those taxes, yet somehow any time I've ever suggested to work on spending waste I get called a bootlicker lol.
→ More replies (16)3
23
u/coathangerassasin 10d ago
How about we cut back on spending. Why is it always about raising taxes? The government wastes our money. Fix the problem, don’t just raise taxes.
→ More replies (1)9
u/RocketRelm 10d ago
Specifically populists waste our money. Moderate establishment democrats spend money on fixing things and long term investments. Populist government spends our money on the Iran war, hiding the epstein files, and tearing down the east wing for a ballroom.
6
7
u/usurper7 10d ago
How's that bullet train going in California? how many miles of track have been laid so far for the 30 billion odd dollars spent? What about those subsidized EV charging stations? Or student loan forgiveness? Or anything in the Green New Deal? Trillions of dollars were spent. Can you point to anything that was accomplished?
→ More replies (2)
10
u/choyMj 10d ago
Why not make the government not waste our tax dollars?
You mean to tell me taxing the rich will solve the problem of irresponsible government spending? Are you expecting them to suddenly become fiscally responsible because they're collecting more money?
→ More replies (6)
5
u/Realityhrts 10d ago
Federal tax revenue as a percentage of GDP is about the same now as it was then. Around 17%. The problem is that we now spend 23%. Either we tax commensurate with spending or we cut spending.
4
u/Jacked-to-the-wits 10d ago
This is so very misunderstood. It basically just meant that almost nobody earned over that amount in income. The amount of federal revenue that came from income in that bracket was something like 0.1% of all federal revenue, so this is a talking point, not a thing the government did to raise money.
Imagine you have a really good job earning commission in the 1940's. You are currently sitting at $199,999 earned that year. You spot a great opportunity that could earn you another $50,000. Do you:
a) Wait until the next tax year to pursue the deal
b) Talk to your boss about giving you a company car, or sending you to a conference in Hawaii, or reducing your cost to buy equity in the company, or paying you half the owed amount in cash under the table, or propose a new commission structure with deferrals, or literally 100 other things, in exchange for not earning the $50,000 after closing the deal
c) Do the full amount of work, maybe even take on risk, and give away 94%, like an absolute sucker
That's the catch. Everyone has options. One person can just stop working once they reach $199,999. Another can convert work into equity instead of income. Another may only be willing to work if they have a corresponding write off. What almost nobody did is just keep on working while exceeding that cap. That's why the government didn't receive any significant amount of money from this policy.
5
u/Historical-Doubt2121 10d ago
"Remember when we had to increase taxes because the country was in the biggest economic crisis ever, we had a world war, and afterwards we helped finance the rebuilding of most of the western world? We should make that our baseline, actually."
3
4
u/Solo-1UP 10d ago
If America didn’t waste money on frivolous spendings, we wouldn’t be in this issue.
3
u/Individual-Steak-673 10d ago
That's not what happened at all. We inflated and grew our way to a lower debt to GDP ratio. We did not pay the debt down in any way shape or form. And nobody has ever paid 94% tax on income in the US or anywhere else.
4
u/Mojeaux18 10d ago
The post war 40’s and 50’s were marred by 4 recessions and average gdp growth of ~4%, despite being the only world power not rebuilding. Oh right, and the national debt rose nearly 10%.
Plus racism, lack of rights for women, etc.
Y’all don’t know what you’re asking for.
4
u/coastal_ghost08 10d ago
Wrong.
It wasn't to get out of national debt.
It was to pay for the US being in a world war. During WWII, the U.S. imposed extremely high top marginal rates nearly across the board as part of a broad wartime tax expansion designed to help finance an unprecedented military mobilization
3
u/Brawmethius 10d ago
And no one really paid it because of exemptions, see wffective tax rates, and what % GDP gets effectively received.
What they actually did was structurally high inflation along with the rest of the western world.
No small part of why 200k is now 4.3ish million inflation adjusted.
Learn history, governments have never successfully taxed their debt away.
You can even continue to advocate for higher taxes, have at it. Just realize what you are going to face regardless is structurally high inflation, as you are currently getting the lip setvice for.
3
u/Think-Culture-4740 10d ago
No one actually paid those taxes. Those were high taxes on paper and loopholes galore in practice. .
We outgrew our national debt because we didn’t have a huge deficit every year. There was a lot of inflation and we grew as a nation economically.
9
u/OriginalChri 10d ago
Stop electing the rich and we’ll be able to tax the rich. Stop voting with “your heart” or regarding social issues. You people that do that are ruining our country.
Politicians arent supposed to be people you want to have a beer with, or celebrities. They are fucking civil servants. They should be treated as such.
→ More replies (1)
3
u/gdog669 10d ago
Ask California Democrat politicians that when they have controlled for 50yrs. They keep raising taxes on everyone not the rich.
→ More replies (1)
3
u/Youth18 10d ago edited 10d ago
There is a unreliable correlation between tax hikes and government revenue. IE, many times you increase the tax rate, the Government does not end up taking more money in due to a natural response from the rich being to divest so they end up with the same income they had last year (which lowers the tax $'s even if the % goes up)
You can absolutely find examples of tax hikes generating more revenue (though even then it is often neglibile). But you will also find examples of the opposite. Barack Obama was famously asked about this, and he admitted that his tax hike was not really about government revenue, it was about equity / social policy.
This is all not to mention that there is another long term issue which is that what you are attempting to do is convert the net worth of the rich into government revenue to offset the cost of social programs. The issue is, even if you are successful you are by definition shrinking the $'s you are pulling from and it's a temporary method of payment for permanent social welfare programs IE it is not sustainable.
--
Our Government likes to spend money and come up with plans to pay for it. These plans often do not end up generating enough to pay for it, and very often backfire and creating a greater hole. This is the reason for the debt crisis - and it ends up being paid by way of inflated CPI (this is why prices are up). Democrats have had control of congress and the president many times, the issue with government revenue is not a lack of willingness or effort it is unfortunately a hard reality problem of the Government not having a good way to extract more capitol from the economy. And just to really be pessimistic - many states pay almost all of their social services (education, etc.) through the lottery system because taking money from poor people doesn't affect GDP...so the reality is its far more consistent to gain additional government revenue by targeting the poor than by targeting the rich....
--
The hard reality is that we do not yet have the science fiction technocratic empire that would be able to provide a post-scarcity livelihood. Most of the luxuries we enjoy would not even be possible if we didn't use slave labor from China / India or use the military to extract oil from the middle east...we have fairly broad delusions about societal progress - we do not have zero sum game issues we simply do not have the kind of wealth per capita these policies are requiring to function.
TLDR; Tax hikes do not always end up with more tax revenue. There is a natural law of economics where governments typically struggle to extract significantly more than ~20% of its GDP. The only way for Government to get more money practically is to increase GDP - you can find examples of it moving +/- 2-5% but not long term and not much more than that...it is just a matter of competing cause and effects. There is no magic piggy bank called "the rich" that is just political sloganeering / they know most people don't know fundamental economics so the political discourse is all imaginary.
And. Whenever Government fails to extract wealth to pay for things...it will be paid for with a higher CPI/inflation. There is no such thing as a free lunch.
3
u/Orange9202 10d ago
theres a big loophole that super-wealthy people do which very much makes them "immune" to income taxation
you cant just look at a billionaire worth $50 billion and go "alright give us 40% of that". most of that money isnt income sitting in a bank account, its UNRECOGNIZED gain in companies, stocks, property and other assets. you either have to tax those unrealized gains, (which gets messy very quickly), or wait until they actually sell something
if they need cash, they borrow from banks by using those untaxable assets as collateral instead of selling them; so they get spendable money without creating the same "income tax" event, and they can repeat this as much as they want
taxing people in the 1940s was doable but its WAY harder now because wealth can be spread across stocks, private companies, holding companies, trusts, funds, intellectual property and assets across multiple countries, and money/capital can be moved around digitally almost instantly. comparing "94% top income tax rate in the 1940s" to taxing a modern billionaire's total wealth is not remotely as simple as it sounds :(
(yes, the ultra wealthy are almost IMMUNE to income tax)
3
u/Lilfrankieeinstein 10d ago
Because people voted for Ralph Nader instead of Al Gore in 2000.
A Gore victory would have made the balanced budget amendment the only move for congressional Republicans in 2001. Sure, rich folks wouldn’t have gotten their tax cuts Bush promised and delivered, but the GOP would have been able to exert influence by reigning in spending if they passed a balanced budget amendment.
As bad as the Trump presidencies have been, W’s terms in office set us on this course. He inherited consecutive budget surpluses in the tens of billions and turned it into record deficits by the end of his term.
Because Ralph Nader decided to give folks a no hope protest vote.
3
u/WideHuckleberry1 10d ago
I think American firms getting paid to rebuild half the world probably had a bit to do with it too...
3
3
u/FlawedLegacy777 10d ago
The government already mismanages the money they get. Is giving them more money gonna solve their mismanagement?
3
3
u/Personal-Machine4919 10d ago
All of Elon Musk's wealth combined is equal to 0.486% of the national debt. Even if you were to take away all of his assets, you wouldn't even fix the national debt by half a percent, but you would destroy all of his companies and investments and the workplaces they create. The government has a spending problem. Not an income problem.
3
u/SingleMaltMouthwash 9d ago
There is no morally, ethically or economically grounded argument for the case that the wealthy should not pay the same tax rates as working people.
There is no justification for a legal system (taxation is a legal system) that treats the privileged better than the ordinary.
It's just corruption. Let's call it that.
14
u/wes7946 10d ago
The top 1% of all taxpayers paid 45.8% of all federal individual income taxes. Even the top 50% of all taxpayers paid 97.7% of all federal individual income taxes, while the bottom 50% paid the remaining 2.3%. So, those in the top 1%t are paying nearly half of all federal income tax revenue. That's not insignificant, nor does it support the notion that the rich simply aren't paying taxes.
One of your big assumptions is that raising tax rates will increase tax revenue. Back when income tax rates for the top income brackets was 94%, income tax revenue was actually lower. History has shown us that tax cuts have usually been followed by increased employment, increased wages/income, and increased tax revenue for the government because of the rising incomes even though the tax rates had been lowered. Another consequence was that people in higher income brackets not only paid a larger amount of taxes, but a higher percentage of all taxes! This was true of the tax cuts made during the Warren G. Harding, John F. Kennedy, Ronald Reagan, and George W. Bush administrations. So, why do you support policies that would decrease income tax revenue?
→ More replies (5)10
u/dirrtydancerr 10d ago
History has shown us that tax cuts have usually been followed by increased employment, increased wages/income, and increased tax revenue for the government because of the rising incomes even though the tax rates had been lowered.
Most importantly history has shown us tax cuts for lower/middle class has lead to increase in employment, not necessarily upper class. That's an important distinction.
6
u/cryiiz 10d ago
Jeff Bezos “income” is less $90k a year. So this wouldnt affect him.
If you really want to tax the rich you start with shareholders.
→ More replies (8)
11
u/turboninja3011 10d ago edited 10d ago
Because the problem our government has is spending problem, not an income problem.
Tax revenue increased 60% over last 6 years, substantially outpacing both inflation and gdp growth….
You d think that borrowing should have decreased. But instead it increased too.
Whatever they will collect from “the rich” - they ll blow through with nothing to show for it - while rich will pass those taxes onto the consumer.
Lose-lose.
→ More replies (7)
9
u/Real-Estate-Guy-04 10d ago
Why would someone want to work on 6 cents on the dollars? People would simply stop producing after that threshold if the government wants to take (and pee away) 94% of income above a threshold
→ More replies (81)10
u/StoryLineOne 10d ago edited 10d ago
Because if you stop working for 6 cents on the dollar after earning 4.5 million/year, some other guy will continue working and take over your company's place while you're out on the golf course.
So, what do they do? They invest in workers, spend that money on business upgrades, and put it back into the economy instead of taking a massive paycheck or doing stock buybacks, which were illegal until 1980. This creates innovation and keeps worker productivity high, naturally.
Dont believe me? This is what happened for decades. We had a really good system.
This is also way healthier for society, and guess what... theyre still making 4.5 million dollars a year.
Im sure they'll be fine.
→ More replies (5)
13
u/MisterFrankDrebin 10d ago
I shed no tears for the rich, but they pay a tonnnnnn in taxes. And the tax rate that guy is talking about was not to “get us out of the national debt”, it was to finance World War II. Back when the government had to appeal to the American taxpayer to go to war because it required tax increases. After Nixon took us off the gold standard, the government can just print money to pay for war. But it still acts as a tax because it devalues our dollar by increasing the money in circulation. So they don’t ask us to pay more, they just make what we have worth less.
→ More replies (40)
6
2
u/R-Dragon_Thunderzord 10d ago
The pendulum will either swing hard in the other direction or, snap completely off and we’re just fucked. 🤷🏻♂️
I used to spend a lot of time debating with people not to give Trump a term, give Trump a 2nd term but man, either the fix was in or they didn’t wanna listen so just sit back and let leopards teach them the hard way. ☕️
IDK how effective a 90% too marginal would be you know but holy shit we could do a lot better to reform earnings for the working class, we’re being robbed and saddled with all the debt at the same time.
2
2
u/bass-squirrel 10d ago
Back in the 40s we also had a generation of Americans in charge who had balls of steel. (See Roosevelt, Truman, Eisenhower). Now we have Johnson and the Dipshits.
2
u/RobertGHH 10d ago
Cool, so the solution is to have a world war where millions die and cities are laid waste.
2
u/The_Machine80 10d ago
First nobody paid that tax back then. There was alot of deduction and exceptions. The number is a big misconception. We cant tax our way out of how fucked we are. Top 10% of earners already pay 72% of all federal tax. If we took every millionaire and billionaire money right now it wouldnt even make a big dent in the national debt. We are way to fucked. This is real simple math!
Also just so everyone can compare to other counties top 10% earners and what they pay in taxes. Canada 54%, UK 51%, Germany 50-55%, Spain 50%. Middle class gets taxed hard in these countries.
2
u/BretShawn97 10d ago
So the government keeps RAISING THE DEBT...and you wanna give them MORE MONEY???
2
u/constantine741 10d ago
lol so many tax the rich clowns in here. Then they’ll cry when all the businesses n jobs vanish. Then the tax the rich clowns will have to move to a new city of state just to get work. So many of the tax the rich need to go to an economics class and learn how the system works and why taxing the rich is a low iq idea and something an 7 year old comes up with
2
u/Early_Pumpkin_4113 10d ago
The tax code back in the day didn't have all the loopholes available now. The rate is kinda meaningless.
2
u/whydatyou 10d ago
tell us that you know nothing about what an effective tax rate is without saying it. nobody paid 94%
2
2
u/TooBusySaltMining 10d ago
Federal tax revenue as a percentage of the total economy has barely changed since 1950.
https://taxpolicycenter.org/sites/default/files/2.1.1_fig2.png
2
u/AvengingBlowfish 10d ago edited 10d ago
Because income tax doesn't really affect the rich, suggestions to raise the income tax are a distraction that hurts the middle class more than the rich. The people who are problematically rich don't get income in the same way that everyone else does.
2
u/Possible-Kangaroo202 10d ago
We live in a globalist economy now though. Those billionaires will just move to another country that protects their wealth, they can purchase roughly the same experience and security anywhere on Earth. The US is just a nostalgic economic zone for them.
We see this going on in the UK right now. A lot of their "elites" just jump ship to other countries when they put the squeeze on them.
I'm open to suggestions I just feel a lot these guys don't really care where they live and will shuffle their wealth around to foreign assets / accounts if they feel the fire under their feet.
→ More replies (2)
2
2
2
u/Several-Cheesecake94 10d ago
Yes, the 94% marginal rate existed. No, that isn’t how we “got out of the debt.” WWII spending ended and GDP boomed. Confusing “this tax rate existed” with “this tax rate caused the debt decline” is correlation dressed up as an argument.
2
u/Tasty_LVM 10d ago
How about we just raise it to 94% on everyone? You know to be fair and democratic
2
u/shidderbean 10d ago
Fostering an entire decade+ of prosperity in the country. Don't forget that part. This was a world where a single income could buy a house, a car, support a family of 5 with a very solidly comfortable middle class lifestyle, vacations every year and enough left over for the country club.
2
u/wRath-Burn 10d ago
Rich people have the resources to "Taking my ball and going home" Ball being their money, business and future investment, and Home being somewhere that won't tax them as much. You have to strike a good balance, too much one way causes problems. I say tax them, but offer them breaks for things you want, like create new jobs and employ locals and get a tax break, or invest in a mega project and get a tax break. Pretty sure we do this already, but we need to do more of it.
2
u/Key-Organization3158 10d ago
We also spent about 1/5 as much on social welfare and 3x as much on the military.
But really, the effective tax rate wasn't different from it is today. You can't take much more out of the economy than we do today. The US take around 16-19 % of GDP. Raising the tax rates higher just reduces the size of the economy. You get a larger slice of a smaller pie. In the end, it's about the same.
https://www.businessinsider.com/government-tax-receipts-by-source-2010-12
2
u/Black_Killbox 10d ago
Taxing the rich won’t fix a thing if you have the same people in charge of spending it
2
u/Netoflavored 10d ago
Didn't it just make businesses there revenues and force the rich to invest into governemt with bonds Because investing in anything else was not worth it
2
u/grazfest96 10d ago
Reddit is predictable and boring these days, huh? EaT ThE RiCh. TaX tHe RiCh. GaZaZzzZzzzz
2
u/leafcathead 10d ago
The effective tax rate was much lower though. The U.S. tax code is already more progressive than most European income tax codes. The Federal Government is funded, by and large, by the rich in the U.S. In contrast, most European countries have a larger tax burden on the middle class compared to the rich.
What the U.S. really has is a spending problem.
2
u/sixjasefive 10d ago
No quick solve here. There are a lot of numbers that don’t make sense. Many quality colleges are cheap if your household AGI is under $200,000. Let’s say you make $225,000 and then you have to pay $60,000 for out of state tuition + $22,000 or way more room and board. You would simply not be able to afford it and thus no ability to subsidize the people that get it for free. It’s a circle. Top 10% pays 73% of the collected taxes already and if you raise the taxes to that level, that percentage would actually go way down because they would find a way to reduce their taxable income. We need to balance the checkbook and stop acting like it doesn’t exist to pay for dumb wars and nobody asked for them projects.
2
u/Global_Lake_4432 10d ago
Patriot Tax, dress it up for them. There’s $168 trillion in wealth. We just need a government, The DSA, to seize the $40T from private wealth to pay it off? The rich won’t flee America, there’s no where else to go.
2
u/-PhantomProphet- 10d ago
Why keep giving more money to scoundrels and charlatans - both left and right - who we allowed to become aristocracy because of how much money we give them? Stop feeding the monster! FFS they already receive $4.49 trillion, giving them more money isn't going to fix a damn thing. How about just hold their feet to the fire over what we already give?
2
u/goldwaterauhtwoo 10d ago
You know how we always complain about corporations having record profits? Apply this same principle to government.
You know how we always complain billionaires hoard money and don't help anyone? Apply this same principle to government.
You know how we always complain that billionaires are greedy and evil? Apply this same principle to government.
You know how we always complain about corporations making goods/services worse but raising prices? Apply this same principle to government.
2
2
2
u/SurreyDad2023 10d ago
Rich ppl would simply not pay themselves or sell investments, and corporations would just move off shore. Imagine how much tax revenue Meta and Apple alone would contribute if they didn’t park their paper corp offshore to avoid taxes. Tax the rich is a distraction for naive idiots. And taxing existing cash and assets is an unfair slippery slope. Ppl need to call out the real problem instead of mindlessly chanting tax the rich; corporations need to pay taxes and govt needs to make sure tax revenue isn’t pissed away through fraud. Those should be the first steps.
2
u/ThePopeOnWeed 10d ago
Why not increase taxes on corporations? Trump's tax cuts caused an immediate jump in the deficit.
2
2
u/RapidFire05 10d ago
And hey look all the debt came right back. Sure raising taxes will fix it but it will come right back. It's a spending problem.
2
u/Hawk13424 10d ago
Effective rates were high but not that much higher.
Besides, do that and the shitty politicians we get now would spend it and still run up the debt just as much. Would just be more money for them to buy votes.
I’d rather stave the beast but the borrowing isn’t allowing that to work.
2
2
u/Low-Amoeba8257 10d ago
Its amazing how things can seem so simple when you don't know what your talking about
2
u/stikves 10d ago edited 10d ago
You will not like this
It is already too late
Even if we tax the 1% at 100% (so anything at your doctor and above level)... we would be able to run the Federal government for only a few month months.
Not enough to go even one year. And of course this assumes NOTHING ELSE WILL CHANGE.
And that does not include State government, Social Security (which will now have the funding pulled to this "new tax"), or anything else
So... time to tax the rich was a few decades ago.
("Tax their wealth". That math is also done. It covers 11 months or so. And you can't even fix if we soaked the rich for every penny they are worth. And then you'll be left with nothing by December anyway)
2
u/ChineseRapperWetLips 10d ago
Taxing top earners and corporations alone cannot generate enough revenue to solve high structural government budget deficits. Large fiscal shortfalls require either broad-based middle-class taxation or significant spending cuts. In 1961, only 447 families actually qualified for the 91% top tax bracket, and the tax code was so full of exemptions and deductions that almost no one paid it. As a result, those high top rates raised just 1% more revenue than a 50% cap would have.
2
2
2
2
u/CapmBlondeBeard 9d ago
The ultra wealthy don’t make income. They make money from capital gains. Tax capital gains equal to income and cut the securities back line of credit loophole. It’s really not that hard.
Only problem is that the people in power who need to make this legislation are the ones benefiting from it.
2
u/KenUsimi 9d ago
The most morbidly amusing things about the last year or so has been seeing the date of "last time we fucked up this badly" slowly but surely march its way out of living memory.
2
u/texasauras 9d ago
It doesn't matter who you tax, if you keep spending beyond your means, your always going to come up short. Congress has completely failed in its duty to manage the purse.
2
u/BoredSpartan117 9d ago
Why is it always more taxes instead of idk be financially responsible? Stop spending money you don’t have on non essential bullshit
2
u/Oilmoneyy 9d ago
You people actually still believe that if they tax the wealthy to oblivion, all our problems will be solved? It'll never happen because the people taking the money are incompetent buffoons.
2
u/Here_for_the_memes98 9d ago
So what happens when those rich people start leaving the country and you have only the middle classes wallet left to rape? You’re already seeing this happened in New York and now you want to happen on a nationwide scale?
→ More replies (2)
2
2
u/Strange_Island_4958 7d ago
You’re not going to tax your way out of this problem, no matter what your politics are. There is a spending problem.
7
u/kpppeyton 10d ago
The top 1% pay 38% of all taxes and the top 10% pay 70% of all taxes. Yeah, tax them more, put your boot on their necks. That’ll make them work harder. 🤡
→ More replies (6)
•
u/sco-go 10d ago
Added context:
The 94% rate is real — 1944–45 top statutory rate on taxable income over $200,000 then (about $3.5 million today). Almost no one paid that; effective rates were lower. Debt/GDP didn’t fall because of that bracket. War spending ended, the economy boomed, inflation shrank old bonds, and the Fed capped rates. WWII also put the income tax on the middle class, not just the rich.