Throughout discussions here I have read a number of comments similar to this by different participants here:
“70% tax on incomes beyond $10,000,000 would be neither egregious or bad for the economy. It would affect .05% of US citizens. Our economy was doing fantastic in the 60s when this same rate hovered closer to 90%.”
During these discussion it was not only pertaining to marginal tax rates, comments would also include that of unions and other issues as well. Whatever the case there seems to be a fair degree of agreement that these were generally good economic times. So does anyone here believe that through high marginal tax rates or other means we will be able to reproduce the economy of the 1960’s?
PS - Obviously I’m speaking metaphorically and not talking about eliminating technology etc.
That article is written by someone for whom English is a second language and pretty meaningless imo but that’s neither here nor there.
That said, how could it not help the middle class? The government is going to take 20 percent of GDP one way or another and that just isn’t going to change. Ever, unless it goes up. Taking more from those that can best afford it means taking less from everyone else.
I’m not totally convinced it’s the right thing to do, but I’ll admit I’ve been leaning that way lately.
Not sure I follow you regarding the article? Here are specific quotes I thought were pertinent:
"The issue whether imposition of Luxury Tax is useful or harmful is a debatable one. Though Luxury Tax is considered to be a means of extracting a part of the wealth of the rich class, a fall in the tax amount leads to decrease in the price of the luxury goods, leading to sufferings of the middle-class workers. In an attempt to increase Luxury Tax on luxury items like cigarettes, there is every possibility that black marketing may start on substantial or high levels, for supplying the consumers with more cigarettes. Termination of such criminal activities arising out of the imposition of Luxury Tax leads to a fall in the income generated from legal sales tax. Not only this, curbing of these criminal activities may as well demand spending of more money.
Imposition of the American Luxury Tax may sometimes decrease the purchase of certain luxury items. For instance, in the early part of the 1990s, a 10% Luxury Tax was levied on fur, costly jewelries, airplane and car purchasing worth $30,000 and above. This resulted in a sharp decrease in their purchases, causing problems to the producers of the goods and the retail traders dealing with them. At one point of time, the situation became so grave that Luxury Tax had to be annulled, and was replaced by the 1993 Revenue Reconciliation Act."
In other words implementation of a tax does not automatically mean X revenue will be generated. No one can be certain of the results until it is actually implimented.
There really is no way to reproduce the economy of the 1960’s.
Two prime examples:
Example A: You need to buy a new outfit for a wedding in two weeks. What was the process to get the clothes you needed in that short two week period?
Example B: You are a business owner and want to manufature an item for sale. Would it have been economically feasable (time and money) to have an item manufatured in a far away country and shipped to your business in a timely fassion?
My issue with the article is that I seriously doubt the writers expertise given their poor use of the language, so I pretty much pay no attention to it, though it’s certainly true we can’t be sure of the results to a high degree of accuracy.
The vast majority of the wealthy never actually paid anywhere close to 90% tax on their income. The only ones who saw those kinds of rates were a few entertainers or sports stars who did not have creative tax accountants.
Of course who was the evil person who brought down the extreme tax rates in the 1960s? None other John F. Kennedy:
A return to confiscatory tax rates would simply increase the number of highly paid celebrities and executives who renounce their US citizenship and move overseas.
