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75% Tax On Rich--Could It Work?

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It's very interesting to see what transpires from this. I think at the heart of what this is is increasing revenue for what a society calls for without reducing jobs in the short-term. I see it as a very important big step with what is the financial mess in the EU. It's very bold, and to me it makes a lot of sense. What you need in a situation like this is concrete action --- and I've talked to the CEO of US company who has said over and over again, here in the US Washington is a mess. It's not about taxes or the threat of taxes, it's the lack of direction by both parties, or the absolute zero getting done in the US Congress.

 

When a country steps up and finds a way to pay their way to balancing their budget, especially if they are an advanced nation with a high level of GDP, the amount of confidence that creates in financial terms, is a big shot in the arm for creating more demand for jobs.

 

It is not what they call, redistribution, at least not in my mind. The problem with Greece, or Italy, let's say, is way too much tax evasion.

 

Here in the US, raising taxes where you can helps to stall budget cuts by the government, and now you need government spending more than ever, so that's a good thing.

 

Also, regulation that protects all investors makes a lot of sense.

 

The stuff we're seeing now, it's from years and years of financial abuse, erosion of fundamental banking concepts, looting of taxpayers money to pay off Financial Firms who know no end to the largest of greed.

 

People ofter say, this is such a long-term job recovery we are experiencing since the 2007/2009 recession. I say, it could have been a hell of a lot worse. There were years and years of decay with no real action by our government leaders.

 

Peace!

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It struck me as an uncharacteristically bold move. I haven't read up on the issue much yet, but people (predictably) have problems with the high income tax, generally because of fears of increased tax avoidance. Investment income is taxed much lower than income, as one would assume. In addition, people don't have to pay French taxes if they move to another country, for which there is no penalty (exit tax, loss of citizenship, etc.). It's going to take some time to get good info on the plan.

 

Even so--it's interesting.

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It struck me as an uncharacteristically bold move. I haven't read up on the issue much yet, but people (predictably) have problems with the high income tax, generally because of fears of increased tax avoidance. Investment income is taxed much lower than income, as one would assume. In addition, people don't have to pay French taxes if they move to another country, for which there is no penalty (exit tax, loss of citizenship, etc.). It's going to take some time to get good info on the plan.

 

Even so--it's interesting.

 

Yes, definitely.

 

There's so much financial hijinx, if you can use that term loosely which people do, we forget to get upset by all the thievery which there is, with no doubt. It's easier for the IRS to target the wager earner than the rich millionaire.

 

It's more about profiting from bubbles, being an insider rather than a simple person now forced to participate in a 401K plan.

 

Basically, could there ever be a Wall Street plan that would raise the standard of living for all who invest in it? I mean, penchants invested deeply in this, municipalities, every level of government worker lost out in this financial fiasco that led to --- ttaa ddaa, huge taxpayer debt. So it becomes who pays for that, and what does that mean for any economy.

 

I somehow feel it's the right move without knowing, I really have a strong feeling that it is. I don't anticipate that sort of thing happening in the US anytime soon regrettably. It's not something where you can hedge your bet on the outcome --- which makes it such an attractive prospect/ a bold first step!

 

Thanks for the post!

 

Peace!

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Couldn't get the link to open (my fault, dial-up internet is very slow. And yes, I know I'm living in the stone age)

 

Remember there was a time when the top tax rate was 90%. That may seem like a lot, but the rich still were able to, you know, be rich. They still had multiple cars, mansions, took elaborate vacations in exotic places, etc. etc.

 

We need to tax the rich more in order to grow the middle class and shrink the poor. I know cons say that's spreading the wealth around and will call me a Socialist. I'm okay with that. I don't think everybody should have the same. But I think more people should have the oppurtunity to have a decent job, make a large enough income to support their family, be able to afford a decent house, HAVE MEDICAL CARE! That kind of stuff.

 

The middle class is shrinking. Anymore it seems you either have everything or you have nothing. This needs to change.

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I wonder about the usefulness of a "temporary" high tax rate--it's easy to imagine people holing up in Belgium for a couple years till the rate goes back down. Nationalist sentiment seems to affect the gravity there, though.

 

In general, it seems the president, Francois Hollande, seems to be between a rock and a hard place on his budget. In all the summaries of this 75%-proposal I've seen, there has been criticism of Hollande's lack of willingness to trim government spending--he seems to be the world's only Keynsian. On the other hand, he's facing protests like this:

 

http://www.reuters.com/article/2012/09/30/us-france-protests-idUSBRE88T0DB20120930

 

So he's being criticized for not imposing austerity and for imposing austerity. Of course, the opinions of the different groups protesting him may not carry equal weight in political discussion, but the situation is obviously volatile.

 

I respect the fact that he seems to be trying to impose a coherent fiscal policy, in any case: I hope it gets through their senate so I can appreciate the show from the sidelines.

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It seems that the biggest question about the budget is the possibility of reducing the deficit to 3% of spending by 2013. Socialists continue to criticize the budget for its untimely austerity (http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=534873&version=1&template_id=39&parent_id=21), and a growing number of economists seem to be ridiculing the 0.8% estimate for economic growth as "madness" (http://www.lemonde.fr/economie/article/2012/10/02/3-de-deficit-les-signaux-contraires-de-la-majorite_1768624_3234.html), especially given the likelihood that France will be impacted by worsening conditions throughout Europe. In general, Hollande's popularity is on the decline. In the end, I doubt this budget will serve as a model elsewhere in Europe, let alone here.

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Four years after electing a supposedly progressive president with supposedly progressive majorities in both houses, we haven't even gotten to a 39% tax on them, so I'm not sure if I care how it works out in France. Seriously, the idea four years ago was to take rich people's taxes back to where they were during Bill Clinton's term - you know, when rich people were practically drowning in money, and we weren't even able to do that with the WH, Senate and House? Seriously, what good does the Democratic Party do for its progressive base? How patiently do we have to wait for a few scraps from the table where special interests feed the politicians of both parties?

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Four years after electing a supposedly progressive president with supposedly progressive majorities in both houses, we haven't even gotten to a 39% tax on them, so I'm not sure if I care how it works out in France. Seriously, the idea four years ago was to take rich people's taxes back to where they were during Bill Clinton's term - you know, when rich people were practically drowning in money, and we weren't even able to do that with the WH, Senate and House? Seriously, what good does the Democratic Party do for its progressive base? How patiently do we have to wait for a few scraps from the table where special interests feed the politicians of both parties?

 

The Democrats weren't willing to take heat for the expiration of all the Bush tax cuts, which is somewhat understandable given that it probably would have slowed the economic recovery (such as it was and is). Less justifiable is the fact that they're now backing off on estate taxes, which wouldn't have any significant drag on the economy and would put the tax burden on the right people. The Democrats aren't progressive in any meaningful sense of the word.

 

I'm still keeping an eye on Europe, in any case, since what they do there will influence what we do here--especially if the bottom falls out, as seems distressingly likely.

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The Democrats weren't willing to take heat for the expiration of all the Bush tax cuts, which is somewhat understandable given that it probably would have slowed the economic recovery (such as it was and is). Less justifiable is the fact that they're now backing off on estate taxes, which wouldn't have any significant drag on the economy and would put the tax burden on the right people. The Democrats aren't progressive in any meaningful sense of the word.

 

I'm still keeping an eye on Europe, in any case, since what they do there will influence what we do here--especially if the bottom falls out, as seems distressingly likely.

Some Dems are more progressive, some less. But as a party they get a big red F when it comes to bravery. They couldn't even defend the word "liberal" when it has a dictionary definition that proves liberal is a good thing. There are many, many Dems I really like and respect, both in Washington and people I know personally. But it's actions of the party like this that keep me from actually becoming a Democrat myself.

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And let me be clear on something, when I talk about no bravery I mean when dealing with the Republicans. And I'm also not saying that this goes for all Dems, obviously it does not. But it does for some, and they are the biggest threat to the left.

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Couldn't get the link to open (my fault, dial-up internet is very slow. And yes, I know I'm living in the stone age)

 

Remember there was a time when the top tax rate was 90%. That may seem like a lot, but the rich still were able to, you know, be rich. They still had multiple cars, mansions, took elaborate vacations in exotic places, etc. etc.

 

We need to tax the rich more in order to grow the middle class and shrink the poor. I know cons say that's spreading the wealth around and will call me a Socialist. I'm okay with that. I don't think everybody should have the same. But I think more people should have the oppurtunity to have a decent job, make a large enough income to support their family, be able to afford a decent house, HAVE MEDICAL CARE! That kind of stuff.

 

The middle class is shrinking. Anymore it seems you either have everything or you have nothing. This needs to change.

 

 

I would say all the argument about taxation is taxing. Like you said, rich folks paid a whole lot more in the 1950's when our economy was very strong. Now, we have the lowest taxes ever. I grew up in the sixties which were the tail end of real prosperity in the US. Seems to me what brought the country down was never taxes. It started with Vietnam - that war wiped us out. Then next, the oil embargo - we are dependent on energy big time and that crippled our economy for a time. These two events brought on stagnation.

It's not really about taxes. It's something else.

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Seems that France's Hollande is being ridiculed throughout Europe for his temerity in taxing rich people. In England, David Cameron has stated he'd like to "roll out the red carpet" for rich exiles, and Boris Johnson has called it (with typical humorous exaggeration) the biggest "tyranny" since 1789. I'm interested to explore more similarities between the rhetoric of intelligent English conservatives and idiotic American libertarians.

 

http://www.lefigaro.fr/impots/2012/10/09/05003-20121009ARTFIG00423-le-maire-de-londres-tacle-la-tyrannie-fiscale-de-la-france.php

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If one believes, as I do, that the fundamental issue facing all slowing economies around the world is concentration of wealth (concentrated wealth leaves less money in the hands of the general populace thereby reducing demand for goods and services creating a reduction in available jobs), then a tax that ceases the flow of wealth to the top 1% would be helpful. However, this would only work if the 99% benefits. This is not the case. Not in France, not in the U.S., not anywhere.

 

When government takes in more revenue, then it simply spends it and what has happened is that the top 1% are the largest beneficiaries of government spending. Whether it be health, defense, contracting work, or whatever, the top 1% so totally control all aspects of our economy (government or private sectors), they continue to be the primary beneficiary of all government action. In other words, government is now the primary means for the top 1% to get wealthy (Fannie Mae and Freddie Mac, as well as the FHA are prime examples. The Federal Reserve is another example).

 

This is more than just theoretical. The top 1% have increased their wealth dramatically as a result of Obama's policies and continue to do so. Obama is a gift that keeps on giving for the top 1% and Romney will even be better for them.

 

For these reasons, I believe that increasing the top incremental tax bracket will not be successful, though theoretically it could help.

Edited by RichF

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Well, glad to see that someone here in Liberals Only is entirely credulous of conservative/libertarian ideology regarding fiscal and monetary policy.

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Well, glad to see that someone here in Liberals Only is entirely credulous of conservative/libertarian ideology regarding fiscal and monetary policy.

 

One of the major issues within Liberal ideology is that there is no sense of "who is paying for all this" as if the Federal Reserve's money printing machine is coming at no cost. Of course it is hurting the very people that they suggest they are trying to help. Printing money drives up costs (just look at what is happening to gas prices in California), reduces the value of employment (there is less demand and therefore less jobs), and destroys the savings of middle class families. This is what happened during all of the Reagan, Bush, Clinton, and Obama years. In essence, the top 1% gets wealthier no matter what happens because the game is rigged to their benefit. They own the industries and they own the government. Bush spent $5 trillion that we don't have as did Obama (all funded by Bernanke's money printing machine) and the 99% are paying for it (household income is the least it has been in 20 years). Romney's answers to our problems may be downright idiotic (kill Big Bird) but Obama's answers are equally absurd (spend more money that we don't have). A real discussion has to involved putting more real wealth back (not debt) back into the pockets of the 99% who have been destroyed over the last twenty years (Biden is right on this count).

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I would say all the argument about taxation is taxing. Like you said, rich folks paid a whole lot more in the 1950's when our economy was very strong. Now, we have the lowest taxes ever. I grew up in the sixties which were the tail end of real prosperity in the US. Seems to me what brought the country down was never taxes. It started with Vietnam - that war wiped us out. Then next, the oil embargo - we are dependent on energy big time and that crippled our economy for a time. These two events brought on stagnation.

It's not really about taxes. It's something else.

Right, the problem is we decide to spend a fuck-ton of money while simultaneously cutting taxes. It just can't work that way. It's like quitting your job then going on a shopping spree. And when the rich aren't taxes, the rest of us have to make up for that loss. Not only do they get the mansions, the sportscars, the limos, the expensive vacations and private jets, WE have to pay THEIR taxes! It makes me want to puke just thinking about it.

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I have never been a believer that what works in one country will necessarily work in another.

 

face it, the french are fkn weird!

 

its a much older culture than ours, they have been invaded by every army but the salvation army, they eat fkn snails!

 

what might be acceptable there would never fly here and vise versa.

 

at the core, any economy is based on the people....and people are different every where you go

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I have never been a believer that what works in one country will necessarily work in another.

 

face it, the french are fkn weird!

 

its a much older culture than ours, they have been invaded by every army but the salvation army, they eat fkn snails!

 

what might be acceptable there would never fly here and vise versa.

 

at the core, any economy is based on the people....and people are different every where you go

 

I dunno--macroeconomists have to be comparativists, with due caution, to be very persuasive. There are probably too many confounding variables to make sense of the effects of this 75% income tax--and no matter what happens you can predict the people who will praise or blame the move. Still, there aren't many countries doing anything interesting in terms of fiscal policy right now, so I'm interested in observing the odd one out.

 

Don't knock escargot till you try it: it's delicious. Classic French cuisine is pretty limited, but all their restaurants serve the same things for good reason.

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A high tax is only going to work with trade barriers up to prevent flight of capital (i.e. America from its founding until the 80's and 90's). Businesses are going to want access to the consumer base and you have to make it to where the only way they can is to pay the piper. Within the framework of the EU, a high tax isnt going to be very effective, since France cant exactly launch a trade war against other countries in the EU.

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A high tax is only going to work with trade barriers up to prevent flight of capital (i.e. America from its founding until the 80's and 90's). Businesses are going to want access to the consumer base and you have to make it to where the only way they can is to pay the piper. Within the framework of the EU, a high tax isnt going to be very effective, since France cant exactly launch a trade war against other countries in the EU.

 

That's been the concern from the beginning. There's apparently nothing--no exit tax, no cost of keeping citizenship, etc.--to keep high income earners in the country. I suspect, though, that most people will just find garden-variety forms of evasion. The tax on investment income is much lower, and there are lots of other loopholes. Worth keeping an eye on things, in any case: the government has already backed off on a lot of anti-business legislation after effective protests, so we'll see if the 75% tax even survives the 2 years it's supposed to last.

 

A high tax on people earning 1M would probably work better here, since there aren't so many desirable alternatives within easy commuting distance.

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Right, the problem is we decide to spend a fuck-ton of money while simultaneously cutting taxes. It just can't work that way. It's like quitting your job then going on a shopping spree. And when the rich aren't taxes, the rest of us have to make up for that loss. Not only do they get the mansions, the sportscars, the limos, the expensive vacations and private jets, WE have to pay THEIR taxes! It makes me want to puke just thinking about it.

 

Yes, the 99% are paying for it in a very insidious way. family income is going down while prices go up. The wealth gap between the 99% and the top 1% is the highest it has ever been, and actually accelerated under Obama, which may help explain the large defection by all demographics from Obama. People's lives are slowly but surely getting worse and no politician cares save Bernie Sanders and Ron Paul (talk about diametrically opposites being in the same place).

 

What we need is a new progressive movement that will encourage fairness in the political system. As it stands now, both parties (including that jerk Schumer) favor tax and economic policies that benefit the top 1%. Why? Because they are all on the payroll.

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