Who would consider this remark smart? If your argument is the same whether a tax rate is marginal, or if it applies to total income, your argument’s unmoored from economics, public policy and basic common sense.
On what planet are these 2 things the same:
1) I pay 70% tax on any income I earn over 10 million. The tax on the rest of my income stays the same.
2) As soon as my income crosses 10 M threshold, all my income is taxed at 70%.
The first is the real proposal - “marginal” rate.
1) I pay 70% tax on any income I earn over 10 million. The tax on the rest of my income stays the same.
2) As soon as my income crosses 10 M threshold, all my income is taxed at 70%.
The first is the real proposal - “marginal” rate.
So if Dan the Patch genuinely thinks both of these economic outcomes are the same, either to the earner or the public, he is unqualified to represent his constituency.
A 70% marginal rate on income over 10 M strongly encourages control persons to leave excess income inside the company, where it can fund R&D, stabilize debt/equity, and PAY WORKERS A LIVING WAGE. It would lead them to self-cap exec pay.
(Why else do you think worker/CEO pay ratio was so much better in Eisenhower era?)
In contrast, a 70% rate on total income would operate as a punishment. It would also be nearly impossible to implement or police.
In contrast, a 70% rate on total income would operate as a punishment. It would also be nearly impossible to implement or police.
Why would it be harder? Because if the 70% rate were total, rather than marginal, it could not be tracked in estimated tax payments (what big shots have instead of withholding). No one at that level is 100% certain what their total compensation will be.
You could also game it.
But the high marginal rate would operate just as it did when we previously had it - ushering in an era of greater dignity and advancement for the working person in America.
But the high marginal rate would operate just as it did when we previously had it - ushering in an era of greater dignity and advancement for the working person in America.
