The concept of soaking the rich is gaining traction. And it is about time.
In the Tax Debate: A Blast of Fresh New Air
By Sam Pizzigati
August 29, 2010 - 11:17am ET
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'Soak the rich,' after years in the shadows, has suddenly become a policy option fit for discussion in 'respectable' media circles.
At long last, we may be witnessing a fundamental paradigm shift in how we, as a society, talk about taxing the rich.
Until this summer, no national pundit — at least no pundit in good standing with the chattering class — would ever dare suggest a federal tax rate on America's top income bracket higher than 39.6 percent, the level in place under Bill Clinton.
Now pundits and the policy wonks who hover around them are openly singing the praises of top tax rates calibrated at 50 or 60 or even 70 percent, a level that would double the current 35 percent rate on top-bracket income.
Who deserve the credit for this abrupt turnaround? That honor unquestionably belongs to James Surowiecki, the New Yorker magazine’s top economic analyst.
The New Yorker occupies a rather unique role in the modern America media echo chamber. The magazine’s high-brow readership and legendary reputation for rigorously fact-checked accuracy lend enormous credibility to any outside-the-mainstream point of view that gets expressed in the New Yorker's pages.
In the August 16 New Yorker, analyst Surowiecki aggressively advanced just such an outside-the-mainstream point of view — on taxing the extraordinarily wealthy. Our current approach to taxing the awesomely affluent, he wrote in a piece entitled Soak the Very, Very Rich, “makes no sense.”
Under this current system, Surowiecki pointed out, a successful dentist who makes $200,000 a year pays taxes at about the same rates as someone who makes $200 million.
We have in America today, Surowiecki's New Yorker analysis would go on to add, “a yawning chasm between the professional and the plutocratic classes, and the tax system should reflect that.”
That reflection could be easy. Lawmakers, noted Surowiecki, would merely need to create new tax brackets for higher amounts of income, starting with a new and higher tax rate on income over $1 million. But, as his New Yorker piece quickly observed, lawmakers would have “no reason to stop there.”
Last week, CNBC gave the influential Center for American Progress, the Washington think tank led by a former Bill Clinton White House chief of staff, an opportunity to suggest how much further lawmakers should go. The Center’s Michael Linden suggested added tax brackets for income over $1 million, $5 million, and $10 million.
Someone making $500,000 a year, explained Linden, shouldn’t be paying “the exact same marginal tax rate on their last dollar of earnings as somebody making $10 million or $50 million.”
Time magazine’s Stephen Gandel, in his reaction to the New Yorker analysis, would stress the multiple benefits of soaking the rich. A “super tax rate for the super rich,” he noted, wouldn’t just “redistribute some of that wealth at the very high end of the income ladder to social programs that end up improving education or paying for healthcare reform or creating jobs.”
A super tax on super incomes, Gandel explained, would also help fix what ails our economy, by reducing “that global pool of money that sloshes around our financial markets and creates all types of bubbles.”
All “that money concentrated with the rich,” the Time analyst pointed out, “makes our economy prone to booms and busts, and less stable.”
The Washington Post, for its part, reacted to the wonky uproar that Surowiecki’s New Yorker column created by quizzing a cross section of tax experts and politicos on how high a super tax rate on super incomes should go.
The University of Michigan's Joel Slemrod, in response, put the optimum top rate at “60 percent or higher.” Emmanuel Saez from the University of California, the nation’s top expert on high incomes, opted for 69 percent top federal rate. Dean Baker, from the Center for Economic and Policy Research in Washington, D.C., suggested “somewhere around 70 percent and possibly a bit higher.”
The Post also put the same question to conservative analysts. Even one of them, former Reagan adviser Bruce Bartlett, called for a rate — at 50 percent — substantially higher than the current 35 percent U.S. top rate.
Robert Reich, the former U.S. labor secretary, last week shoved history into this spirited new tax-the-rich debate. How about, Reich mused in a nationally circulated column, setting the top tax rate at 91 percent, the level where that rate stood back during the 1950s under Republican President Dwight D. Eisenhower?
That 91 percent rate applied to income over $400,000, the equivalent of about $3 million in today’s dollars. The rich, no surprise, loathed that rate. With that rate in effect, they felt their plutocratic power fading away fast.
“The United States Government makes the old 'Robber Barons' look like children,” multi-millionaire Richard Lounsbery, the heir to a mining fortune, fumed to the New York Times in 1959. “And there's no difference between the Republicans and the Democrats, either. The Republicans are Socialists and the Democrats are Communists — that's all.”
Middle class Americans, in the meantime, did just fine in a 91 percent top-tax-rate America. The mid 20th century would see the incomes of average Americans double, after taking inflation into account. “Soaking the rich” helped nurture a middle class Golden Age.
Apologists for America’s staggeringly unequal status quo, until this summer, had good reason to think that history forgotten. Now they have reason to worry. History remembered, after all, can become history repeated.
--ourfuture.org
@Advocate,
It sounds like encouragement, but I won't drink a toast to it just yet.
Theft is immoral and distructive.
1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
2. What one person receives without working for, another person must work for without receiving.
3. The government cannot give to anybody anything that the government does not first take from somebody else.
4. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is the beginning of the end of any nation.
5. You cannot multiply wealth by dividing it.
@ican711nm,
I think you keep forgetting that lying is immoral ican.
Taxation is not theft. Calling it theft is a lie on your part. Taxation is allowed under the US constitution. Calling it theft is ignoring the Constitution ican as well as telling a lie.
@parados,
I just don't understand ican's so-called moral system. He allows, indeed, encourages and praises, the rape and robbery of the average (or not so average as 80% of the working population has suffered) citizen by the oligarchs. YEt, he thinks labor unions are criminals and that it is wrong to fund those who are cut off from earning a living by the oligarchs.
I will earn $22,000 by the end of the year. That is actually a good salary for a "woman of a certain age." Ever wonder why there are so many older women in retail? It's not because they have husbands and/or are collecting Social Security and are just working for "pin money."
So, I just learned that my monthly bill for RomneyCare is either $116 or $149.
@parados,
Parados, plainoldme,
read the following again, only more caredully this time. There is no assertion in it that implies ALL taxation is theft. It is an assertion that implies THAT PART of taxation that is used to take money from those who earned it and to give it to those who did not earn it, is theft.
Theft is immoral and distructive.
1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
2. What one person receives without working for, another person must work for without receiving.
3. The government cannot give to anybody anything that the government does not first take from somebody else.
4. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is the beginning of the end of any nation.
5. You cannot multiply wealth by dividing it.
@ican711nm,
Quote:Parados, plainoldme,
read the following again, only more caredully this time. There is no assertion in it that implies ALL taxation is theft. It is an assertion that implies THAT PART of taxation that is used to take money from those who earned it and to give it to those who did not earn it, is theft.
Redistributive taxation is not theft, by any means. It is social policy. People get money back on their taxes for a variety of reasons; to say they 'didn't earn it' is a fallacious way of looking at the situation. Taxes aren't about what you earn, but instead about how our society functions.
Cycloptichorn
@parados,
You're wasting you time trying to explain basic American history and our constitution to ican. They misinterpret most things about our government when they're on the losing end.
They're now complaining that Obama is taking our troops out of Iraq without any knowledge that what Obama is doing is following the agreement made with Iraq to withdraw all troops by 2011 - signed by Bush, their favorite president.
They don't remember recent history or the meaning of our constitution.
@plainoldme,
plainoldme wrote:
I just don't understand ican's so-called moral system. He allows, indeed, encourages and praises, the rape and robbery of the average (or not so average as 80% of the working population has suffered) citizen by the oligarchs. YEt, he thinks labor unions are criminals and that it is wrong to fund those who are cut off from earning a living by the oligarchs.
I don't agree with Ican's moralistic and categorical approach to economic and political issues. These things are generally far more complex than the relativly trivial theories which zealots of the left and right attempt to impose on them. Most of the doctrinal "solutions" (left and right) have significant side and secondary effects which their protagonists usually fail to predict or even acknowledger after the fact.
However a few questions: What "rape and robbery" has been inflicted on 80 % of the population? and by what "oligarchs"? Nice sounding words, but a few specifics appear called for.
This country has enjoyed very strong economic performance and a high prevailing standard of living relative to other modern countries for a very long time. Who, in broad terms, is doing better? (Before you launch into an essay about the inherent superiority of the European & Canadian social welfare systems, please recognize that most of these countries have elected relativelt conservative governments that are trying very hard to cut back on these programs to avert financial crises becaure these very social welfare systems have become unsustainable, given the adverse effects they have on productivity and economic growth.
Wisdom in these matters appears to me to lie primarily in systems that promote individual freedom and responsibility, and supplement that with public programs for those truly in need. Drawing the line between the two is always difficult and we could argue endlessly (and without result) about it.
I don't think that all labor unions are criminal. However, I (and likely you) am aware of a great deal of criminal activity done by labor unions. I believe a world that banned labor unions would be as harmful as one that gave them lasting statutory power. Unions have indeed done a great deal of good in some cases. They have also done a great deal of harm in others, contributing to the destruction of the very industries that sustained them and their members.
I am sorry to see the rising costs of medical care in the Massachusetts, but aware that a nearly identical system now enacted for the whole country is at work now bring the same bad result to everyone.
@georgeob1,
I agree about labor unions. When college students take Econ 101, we learn that labor unions helped non-union workers improve their pay and benefits. I worked as a union laborer at both a cannery (unloading cans from rail cars and as a timekeeper) and trucking company as a teletype biller earning union wages. The pay was better than average, but I had to work nights, and go to school during the day.
I've been supportive of labor unions ever since - even the teamsters.
However, I have seen what has happened since then to the pay and benefit of our safety officers in the San Francisco Bay Area. Most cities and counties are struggling with tough budgets, and city councils have asked them to take a 9% pay cut to save 65 jobs, but they refused this offer. With this shortage of firemen in the San Jose area, responding to fires have been slower. It seems these safety officers who's pay and benefits more than doubled since 2000 care more about themselves than than junior recruits who lost their jobs or to respond to fires more quickly.
There's always two sides to every issue; some good, and some bad.
@cicerone imposter,
I have had a great deal of experience with labor unions, but always on the company side of the divide. I have led large compamies that employed several thousand workers represented by the Building and metals Trade unions. The truth was that the prevailing wages were largely determined by the economics of the industry. The union "permium" in this area was very small, though they attempted to enact unbounded lifetime healthcare plans that were actuarily impossible to sustain - we resisted successfully. The real mischief came from the attempts of shop stewards (paid workers who have no job but to stir up trouble) and the Union Local leadership to curry favor with their members and create the illusion that they were doing something for all the money they took, by creating issues out of work rules and restrictions. The union "work rule" remedies were always codified in contract terms; rigid; inflexible; and usually very harmful to productivity and the sustainability of the industry that fed them. This usually has the social effect of destroying any sense of common productive purpose in the enterprise, and in my view is the chief source of harm unions do to the industries they infect and to the workers they pretend to serve.
The really sad part of all this was that we were usually quite concerned about sustaining the attractiveness of employment with the company, and generally got our non union employees a better deal than the union ones. The graft, energy and waste that went into sustaining the illusion that the Union Local or National was doing any real service for their workers was the chief element of the corruption and destruction of value I observed.
It's also a nice racket. You don't even have to send bills of invoices to your customers. We were required by law to prededuct the union dues from employee wages and deposit them in the union's account at the same time employees were paid. The sums of money they got were enormous, and very little accounting of it was ever made to the employees.
A lot of the money, of course went to buying off politicians to enact laws that make it easier for them to "organize" workers and expand their enterprise. In its essence it is very similar to a Mafia protection racket.
@georgeob1,
So you think that big business is more honest than labor when they talk the union members into takeing a cut in pay than raise their compensation by reporting they induced the stupid labor people to accept a cut in wages. Not true? It happened to me when I was a steelworker.
@Cycloptichorn,
Cycloptichorn wrote:Redistributive taxation is not theft, by any means. It is social policy. People get money back on their taxes for a variety of reasons; to say they 'didn't earn it' is a fallacious way of looking at the situation. Taxes aren't about what you earn, but instead about how our society functions.
Redistributive taxation IS CURRENTLY theft by ALL MEANS.
If all the people who paid taxes were to "get money back on their taxes," then it would not be redistributive taxation. THOSE TAXES GIVEN BACK' are called REFUNDS.
Income Taxes ARE ABOUT WHAT YOU EARN. If you annually earned zero more than the sum of your exemptions and deductions, your income taxes would be zero.
Our federal government is obliged to function according to our Constitution and the laws our Congress passes, excluding those laws passed by Congress that violate our Constitution. Our federal government cannot legally do anything that our Constitution has not granted it the power to do.
It's lawful for the federal government to tax the people to pay for the services the Constitution grants the federal government the power to perform. It is unlawful for the federal government to tax the people to pay for services the Constitution DOES NOT GRANT the federal government the power to perform.
THE CONSTITUTION DOES NOT GRANT THE FEDERAL GOVERNMENT THE POWER TO REDISTRIBUTE INCOME. If you don't like that, then support efforts to amend the Constitution to GRANT THE FEDERAL GOVERNMENT THE POWER TO REDISTRIBUTE INCOME. But until such an amendment has been adopted, it shall remain unlawful for the federal government to redistribute income.
@ican711nm,
Repeating the same lie over and over doesn't mean it isn't a lie ican.
Taxation is NOT theft.
1. The Constitution authorizes taxation.
2. The Constitution is the law of the land
3. Theft is a crime and a violation of the law.
You are lying when you say taxation is theft or you are claiming that you think the US Constitution is not valid.
@ican711nm,
Quote:
THE CONSTITUTION DOES NOT GRANT THE FEDERAL GOVERNMENT THE POWER TO REDISTRIBUTE INCOME.
The supreme court disagrees with your shouting.
Cycloptichorn
@parados,
parados wrote:You are lying when you say taxation is theft or you are claiming that you think the US Constitution is not valid.
………………~~~~~~~!??!??! ~~~~~~
……………….~~~~~~~~(O|O) ~~~~
…………………~~~~~ ( \~o~/ ) ~~~~
………………..LEFTIST LIBERAL NONSENSE
I DID NOT SAY TAXATION WAS THEFT. I SAID:
Redistributive taxation IS CURRENTLY theft by ALL MEANS.
If all the people who paid taxes were to "get money back on their taxes," then it would not be redistributive taxation. THOSE TAXES GIVEN BACK' are called REFUNDS.
Income Taxes ARE ABOUT WHAT YOU EARN. If you annually earned zero more than the sum of your exemptions and deductions, your income taxes would be zero.
Our federal government is obliged to function according to our Constitution and the laws our Congress passes, excluding those laws passed by Congress that violate our Constitution. Our federal government cannot legally do anything that our Constitution has not granted it the power to do.
It's lawful for the federal government to tax the people to pay for the services the Constitution grants the federal government the power to perform. It is unlawful for the federal government to tax the people to pay for services the Constitution DOES NOT GRANT the federal government the power to perform.
THE CONSTITUTION DOES NOT GRANT THE FEDERAL GOVERNMENT THE POWER TO REDISTRIBUTE INCOME. If you don't like that, then support efforts to amend the Constitution to GRANT THE FEDERAL GOVERNMENT THE POWER TO REDISTRIBUTE INCOME. But until such an amendment has been adopted, it shall remain unlawful for the federal government to redistribute income.
@Cycloptichorn,
Cycloptichorn wrote:The supreme court disagrees with your shouting.
The supreme court HAS disagreed with my shouting.
The Supreme Court has not been granted by the Constitution the power to legislate or amend the Constitution.
Quote:
http://www.archives.gov/exhibits/charters/constitution_transcript.html
The Constitution of the United States of America
Effective as of March 4, 1789
We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.
...
Article III
Section 1. The judicial power of the United States, shall be vested in one Supreme Court, and in such inferior courts as the Congress may from time to time ordain and establish. The judges, both of the supreme and inferior courts, shall hold their offices during good behaviour, and shall, at stated times, receive for their services, a compensation, which shall not be diminished during their continuance in office.
Section 2. The judicial power shall extend to all cases, in law and equity, arising under this Constitution, the laws of the United States, and treaties made, or which shall be made, under their authority;--to all cases affecting ambassadors, other public ministers and consuls;--to all cases of admiralty and maritime jurisdiction;--to controversies to which the United States shall be a party;--to controversies between two or more states;--between a state and citizens of another state;-- between citizens of different states;--between citizens of the same state claiming lands under grants of different states, and between a state, or the citizens thereof, and foreign states, citizens or subjects.
In all cases affecting ambassadors, other public ministers and consuls, and those in which a state shall be party, the Supreme Court shall have original jurisdiction. In all the other cases before mentioned, the Supreme Court shall have appellate jurisdiction, both as to law and fact, with such exceptions, and under such regulations as the Congress shall make.
The trial of all crimes, except in cases of impeachment, shall be by jury; and such trial shall be held in the state where the said crimes shall have been committed; but when not committed within any state, the trial shall be at such place or places as the Congress may by law have directed.
Section 3. Treason against the United States, shall consist only in levying war against them, or in adhering to their enemies, giving them aid and comfort. No person shall be convicted of treason unless on the testimony of two witnesses to the same overt act, or on confession in open court.
The Congress shall have power to declare the punishment of treason, but no attainder of treason shall work corruption of blood, or forfeiture except during the life of the person attainted.
@parados,
Why you people insist in feeding ican is a mystery; he never changes his broken record which happens to be all lies and ignorant of facts.
