Krugman: Bring back 91% tax rate
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You can't compare across time periods without statistically controlling for economic/historical variation and measuring the impact of "published" vs. "effective" tax rates.
1. The period of 1945-1965 was unique in American history. It established the US as the leading manufacturing country in the world, not because of our manufacturing/economic prowess, but rather because of our military might. At the end of WWII, the US had 5% of the world's population and almost 70% of the world's intact manufacturing and transportation infrastructure because most of Europe and Asia had been bombed to ashes during the war. For about 20 years the US had the highest manufacturing price/wage structure in the world. During that period we had very little economic competition from other countries -- completely different than the time period 1965-2012.
2. Most research uses meaningless "published" tax rates. The only rates that matter in economic studies are "effective" tax rates. Effective tax rates have been drastically impacted by two factors: (a) Until the 1980s, wealthy people used leveraged non-recourse loan tax shelters to dramatically lower their effective tax rates. Those shelters were outlawed in the 1980s under Reagan. (b) Wealthy people have for decades "offshored" their money to hide it from taxes. Back in the 1950s and 1960s, people just moved their money to places like Switzerland (usually via trusts). In recent times the laws changed and the "foreign investment vehicles" have become more sophisticated, but the games continue.
Show me a study that controls for the historical after-effects of WWII and uses true effective tax rates across all times periods and then I'll believe it. Until then, all these tax/economy studies are junk science.
1. The period of 1945-1965 was unique in American history. It established the US as the leading manufacturing country in the world, not because of our manufacturing/economic prowess, but rather because of our military might. At the end of WWII, the US had 5% of the world's population and almost 70% of the world's intact manufacturing and transportation infrastructure because most of Europe and Asia had been bombed to ashes during the war. For about 20 years the US had the highest manufacturing price/wage structure in the world. During that period we had very little economic competition from other countries -- completely different than the time period 1965-2012.
2. Most research uses meaningless "published" tax rates. The only rates that matter in economic studies are "effective" tax rates. Effective tax rates have been drastically impacted by two factors: (a) Until the 1980s, wealthy people used leveraged non-recourse loan tax shelters to dramatically lower their effective tax rates. Those shelters were outlawed in the 1980s under Reagan. (b) Wealthy people have for decades "offshored" their money to hide it from taxes. Back in the 1950s and 1960s, people just moved their money to places like Switzerland (usually via trusts). In recent times the laws changed and the "foreign investment vehicles" have become more sophisticated, but the games continue.
Show me a study that controls for the historical after-effects of WWII and uses true effective tax rates across all times periods and then I'll believe it. Until then, all these tax/economy studies are junk science.
The constitution is the holy grail of America, and your retarded monkey spick Guevara is the asshole of the Earth.
The big difference between the examples that you porovided and break of US is that the majority of population in those countries wanted the break up, and was quite happy when it took place, well at first. I witnessed it in front of my eyes.
US will be different because "poor" as they being called would not want a break up, it will destroy their way of life. One must remember an old saying, "God must have loved the poor since he made so many of them".
Why would it destroy the "poor"? According to the Left, the problems the poor face come from low tax rates on the rich, which leads to insufficient government "investment". If the Left had the ability to implement any tax rate it wanted, which it would after such a split, they could put whatever tax rate was required to solve the poor's problems.
I don't see how the poor could possibly be against it.
It's not clear from the article that Krugman is calling for a 91% top marginal rate, but if he is supporting confiscatory rates, he's just wrong.
High tax rates in and of themselves will not address the level of wealth inequality present today in the USA. Rates are TOO LOW for under 100k. Capital gains rates are too low. Carried interest is a farce. 35% is plenty high for wage earners. Couple that with state taxes and you could be looking at close to 50% before sales tax, property tax, and all the other hidden taxes, like in our telephone and cable bills and tolls, etc. Why should the state take 1/2 of a good earner's paycheck? They should not. And all this talk about the lazy takers is a red herring: welfare,unemployed, and food stamp recipients are not a punishing part of the budget. Its Defense, Medicaid, and Medicare that are too thirsty for public dollars. And it's a warped tax code that allows for inequitable taxation private and corporate.
We have a 14 trillion dollar GDP and Federal, state and local expenditures are 7 trillion. 50% of our economy is the government at one level or another. Something to think about. I wonder how that stacks up against the 1950s?
Krugman's portrayal of the average corporate executive living in a suburban house in the 1950s may be correct, but it wasn't because of high tax rates. Corporations then didn't have a stock market with trillions in equity from America's retirment and pension funds. They have it now and they rape it mercilessly with shameless stock option grants.
High tax rates in and of themselves will not address the level of wealth inequality present today in the USA. Rates are TOO LOW for under 100k. Capital gains rates are too low. Carried interest is a farce. 35% is plenty high for wage earners. Couple that with state taxes and you could be looking at close to 50% before sales tax, property tax, and all the other hidden taxes, like in our telephone and cable bills and tolls, etc. Why should the state take 1/2 of a good earner's paycheck? They should not. And all this talk about the lazy takers is a red herring: welfare,unemployed, and food stamp recipients are not a punishing part of the budget. Its Defense, Medicaid, and Medicare that are too thirsty for public dollars. And it's a warped tax code that allows for inequitable taxation private and corporate.
We have a 14 trillion dollar GDP and Federal, state and local expenditures are 7 trillion. 50% of our economy is the government at one level or another. Something to think about. I wonder how that stacks up against the 1950s?
Krugman's portrayal of the average corporate executive living in a suburban house in the 1950s may be correct, but it wasn't because of high tax rates. Corporations then didn't have a stock market with trillions in equity from America's retirment and pension funds. They have it now and they rape it mercilessly with shameless stock option grants.