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So effectively, you won't answer the simple question. Which is rather disappointing as I've answered questions from you before that I'm 100% sure you didn't expect an honest answer from me.
TM
I’d say that the ‘sweet spot’ is probably with the highest marginal tax rate at about 70% or so. That should be for the uber-incomes, obviously, not the average successful small business owner.
70% tax rate? That's pretty extreme.
It would be the highest marginal rate, not an effective tax rate. From 1950-1981ish the highest marginal tax rate was at least 70%, and it may have been our country’s best economic period. After 1980, the highest marginal rate was cut drastically several times. While correlation doesn’t equal causation, it’s definitely something to consider. The large tax cuts for the highest income brackets coincides nearly perfectly with the huge increase in income gap and also the almost unthinkable increase in our country’s national debt.
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Just a brief check belies your assertion. In 1960 the top 20% of earners bore 65% of the income tax burden. Now it's 85%. I'll say it again. Tax rates don't tell the story. Not even close.
So does that mean 1,000,000/year talent now demands $1,700,000/year? And how does the board recoup that? By raising rates?
I think you might be misreading my reasoning for the higher marginal tax rates.
I’m not really targeting the top 20%, and increasing tax revenue from even the top 5% isn’t my primary objective. I’m talking about progressively higher marginal rates at VERY high incomes, primarily to change incentives, making it relatively more attractive to reinvest or otherwise deploy that next dollar productively than to take it as additional personal income.
If that also raises some revenue, great, but that’s secondary to what I’m advocating. In fact, what I’m advocating should actually result in the top incomes in the country paying an overall lower share of income taxes than they currently do, but that would also coincide with a narrowed income gap overall also.
Your math doesn’t make sense.
The question before the panel was tax fairness. soggy used the bullshit term and TM called him out and you answered. You say 70% is fair. The rate now is 37%. Who is that unfair to because it's not 70%? Besides, when marginal rates were that high, nobody paid those rates. I would say the high earners now pay much closer to their marginal rates than they ever did. Using tax rates is campaign wank. We are above that here at Vital.
OK, you're right. So $1,330,000/year demand if they're paying 37% now.
You guys seem to be ignoring that most uber wealthy compensation packages will have a "low" cash salary, to minimize tax burden. I am still not sure some folks here grasp just how extreme the pay disparity is for the ultra rich.
Mark Zuckerberg takes a $1 annual salary. He is worth $181B...I'd argue he's done more bad for the world than good. And this comes all while his Metaverse had $80B in operating losses...
In your example, if the $1M employee is really worth it, perhaps the CEO can take a cut from his $60M compensation package to give one of his top performers a $300k raise to cover this?
Look at the policy trends in recent years, especially the last year.
https://www.theatlantic.com/economy/archive/2025/08/billionaire-tax-study/683987/
The new study is a technical feat, combining data on corporate earnings, private wealth, and individual tax payments. And it confirms that the country’s tax code is regressive, not progressive, at the very top. Every year, America’s richest citizens paper over their earnings with losses and use other creative accounting strategies to shelter their fortunes, as the tax code allows them to do. As a result, the country’s billionaires pay lower tax rates than many of its millionaires do. Indeed, they pay lower tax rates than many middle-class professionals.
In the end, the top 400 Americans paid an estimated 23.8 percent of their income to Uncle Sam from 2018 to 2020—down from roughly 30 percent before the passage of the Tax Cuts and Jobs Act, in 2017. They paid 1.3 percent of their total wealth to the IRS in those years, down from 2.7 percent from 2010 to 2013. Their tax rates were lower than the average paid by all American households.
The Tax Cuts and Jobs Act, Trump’s signature first-term domestic-policy package, helped these billionaires keep more of their money. The One Big Beautiful Bill Act, passed this summer, extends the TCJA’s tax cuts, creates new business loopholes, and lowers taxes on estates. To help offset the revenue losses, the Trump administration is stripping health coverage from millions of low-income Americans and shrinking the Supplemental Nutrition Assistance Program. The rich, including Trump, will keep getting richer. The poor will pay for it.
The only point you seem to be proving is how bad the funneling of income to the top really is. Or how broken our true value assessment is.
This is what happens when you hoard all the money.
Per his tax filing, Trump paid $750 in federal income tax in 2016. How much did you make in 2016? How much federal income tax did you pay?
EDIT - In 1960 top earners bore 65% of income tax burden. Because earnings were better distributed based on value. And people earned more, and it was a prosperous time for our country.
Now, they bore 85% per your numbers. Why? Because they are hoarding all the wealth. And this 85% burden is a drop in the bucket to the wealth generation that occurs through countless loopholes aimed to maximize their positions.
Why does a Walmart CEO make millions, while they have thousands of employees who are on federal support programs because they can barely afford to live?
Corporations are kind of like modern slave owners. Employees have more freedoms now than the original ones, just enough so they don't complain and challenge the system.
To @Joey Bridges point if you don't like it, leave and work for yourself. I consider folks like yourself a value engineer. Not everyone is built this way though. Especially because our country in particular tries very hard to manufacture obedient slave workers who don't challenge the system, work their asses off, get in debt, and spend their lives trying to make ends meet.
Your assessment that the tax burden has shifted downward is backwards. If what you say is true, how is it that 50% pay almost zero income tax. You can make the case that the high salaried taxpayers don't pay enough but not that taxes are unfair when low salaried people pay zero. You are also saying that taking more from the rich and giving it to the government is a good idea. Is there a group of people that are more irresponsible with money than the government? Seriously? You seem to concentrate on certain rich people as if they represent a broad tax base. They do not. They are outliers. Also being wealthy and also being a high earners are two different things. We do not have a wealth tax in this country. I still need to know how our tax system is unfair.
Corporations might be just as, if not more reckless, than our federal government with money. And they have a lot less checks and balances. Even though those mechanisms within our federal government appear broken.
They know they have a federal government (and taxpayer) to bail them out if needed. We've seen this happen.
I would be ok giving money to government for taxes if it actually went to serve American people and the interest of the American people.
I'm saying pay people decent wages, the government would also benefit from this, as W2 employees aren't usually as savvy so they would see greater tax revenue as a result. Making sure the government uses the tax revenue appropriately is a different story.
EDIT - I am more focused on the uber rich folks, the billionaire class, and the folks knocking on their door. The takers. The tiny group of ultra wealthy people with a disproportionate control over politics, the economy, and public policy.
Taxes are just one knob to turn. There are many more.
So I guess TM's question to soggy remains un answered. APLMAN gave it a shot but it didn't answer the question of tax fairness. I guess my assertion stands: "fair share" is a bullshit, campaign slogan. I think only one democrat ever answered the question honestly and I don't remember who it was. When asked "what is a fair amount"? They answered just "more". Fairness never had anything to do with it.
It is a good question. Looking at the current trend, simply "more" tax on earned income wouldn't really help our massive deficit considering they are already very good at contributing little to the common good through this channel. It wouldn't help redistribute earnings any differently. Especially with people and entities at the level we are currently discussing. I don't think it's a one size fits all thing, but shouldn't be "case by case" either.
I typically like to keep things simple, reduce parts/complexity/risk, but I think there are too many variables to simply say more tax means they pay their fair share and we all move on in our blissful little worlds.
What is their fair share?
Who is they?
What service or value are they providing to the individual, society, world, environment, etc. that led to such capital concentration?
Do the pros outweigh the cons on a customer, community, country, and/or global level?
Does the business entity conduct business in a commerce environment that is reasonably just, fair, and that allows for competition?
Does the lowest paid employee within the organization earn a livable wage for the community in which they live and work?
Does the business leverage publicly available data, or data used beyond implied consent towards value creation?
I'd love to be a fly on the wall wherever such discussions are happening to correct our course. I'm not overly optimistic such conversations are happening in the right places yet.
Do you guys think our country would do better if all the public infrastructure we all use and share was owned, controlled, and operated by private entities?
SpaceX is definitely more efficient than NASA. So there is that.
As I said, I'm completely open to changing my opinion, I just need it to make sense in my simple head first.
There’s a part of your argument I’m having trouble reconciling.
You pointed out that when the highest marginal rates were much higher, the top 20% paid a smaller share of total income taxes than they do today.
But now you’re arguing that returning to higher marginal rates would be unfair to high-income earners.
How are you reconciling those two positions? If the period with much higher top marginal rates actually resulted in high earners carrying a smaller share of the overall income tax burden, what exactly about higher marginal rates makes the system inherently less fair to them?
I’m not trying to play gotcha here. I’m trying to understand what measure you’re using to define ‘fair’. There’s at least a correlation between having very high marginal tax rates and spreading the tax burden more evenly among the population based on your own data.
Still isn’t mathing very well. Just to be clear, what I talked about is the very highest marginal brackets and rates. If you’re paying an employee $1M per year, that might not make them even in the top tax bracket. Even if it did, the increased tax rate would only apply to income made above that threshold, it wouldn’t apply back to the first dollar made.
Pit Row
$640,000/year gets you in the 37% club.
You’re using today’s tax brackets. I’m not saying that we should simply replace the percentages in today’s brackets with pre-1980s percentages.
The highest marginal tax brackets should be for much higher incomes. Well into the 7 figures, not $640K.
There are roughly two methods to achieving ideological things. You either create rules that you beleive in and stick to them no matter what, or you have a result that you believe in and adjust the rules to get that result no matter what. The US is built around the former, but we act as though it's the latter.
My opinion is that the light to moderately rich are taxed a-fucking-plenty. If anything, maybe we just need to close those loopholes where the top of the top of the top don't pay anything.
Also kinda think that if the bottom 50% only pay 3%, then why bother taxing them at all. That 3% of the aggregate translates to 12-22% for the 50%, so maybe just let them have their tar-tar sauce..
I'm not the one making the fairness claim. And as of yet, neither are you. It was soggy and T-MAC. The reason I pointed out that the higher rates resulted in a smaller share of the burden was to counter the notion that taxes are less fair now than then, which you asserted with your charts on tax rates. I was pointing out that tax rates are not the important part of the equation. I'm not making any claims as to what anybody's tax rates or burden ought to be or what is fair. I have, in the fairly recent past, been in favor of increasing taxes on the very high earners as they, especially the Wall St. bunch, have been the recipient of a large part of the government's largess post 2008. Specifically, the huge increase in quantitative easing.
As to returning to the 60's era marginal tax rates, it wouldn't affect me but as long we return to the tax deductions that were available then the impact would be reduced quite a bit. Most of those deductions were removed during Reagan's term so it would not be apples to apples. 😉
You're missing the graph that shows the exponential growth of the welfare state and the free shit army.
Maybe my eyes are growing dim, but that "national debt" graph took off like a rocket, looks like about....... 2008. Strange.
Just a hunch, but I bet the welfare graph looks just like it.
What happened in 2008?
I did answer it. I don’t have an exact percentage to give you.
As an overall philosophy I don’t think the richest country in the world shouldn’t be in a position where it can’t cover the interest in its debt and there’s two ways to fix it. Become more efficient and make people contribute more, and I don’t think it should come from the middle class/lower class.
Still getting a laugh outta “Fair Share”.
Ok, I'll start and you all can flame away.
17-20% flat tax on everyone, all income levels. Standard first $100,000 tax free because you have to pay living expenses. But, and a big but, rich people take loans against assets to buy things so they don't have to sell and pay taxes. That would be gone. If you pull funds out through a loan, 10% tax on the loan money. And I would let businesses invest their profits back into the business at a very low tax rate.
Flame away everyone.
Sounds okay to me, but google ai says that total federal income tax revenue would go from 2.66 trillion to 1.44 trillion, which means that if we didn't reduce spending....which let's be honest we're never going to...then we'd be adding another 1.22 trillion to debt on top of the regular 1.5-2 trillion we add every year.
Not sure if you're responding to me but a frame work is a good starting point but not an ending point. And if you paired that with a work requirement for benefits. you'd have less of a burden on the system. And if you had a standard deduction for your living expenses, many people could afford to get ahead. I don't know the exact # that makes it work, but that's my opinion. that and $5 will get you a water at Starbucks.
TM
What problem are we trying to address? If it's a "fair share" dealio, then I'd propose the general idea of trying to get the bezos and gates and zuck and trump types paying taxes. The mechanics of doing that is actually really hard, but I'd propose the objective of getting them to pay income tax.
I also like the idea of shifting tax onto sales rather than income. It would promote saving, reduce whore consumerism, and give people nearly full control on their taxes. Maybe it would be a program that you could choose to enter, rather than forcing it on everyone.
Now I’m still laughing at…
“Reduce Spending”.
🤣
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