What is the optimum tax rate on the wealthy?

[theiguana]

Nice observations. I am guessing less than 1% of the american population knows this

Quote from Arnie:

Assuming the wealthy get most of their income from investing, I would say the rate would need to be just below that where it starts to affect their decisions.

A good example was back in the '80's they passed a "luxury" tax on yachts. Well, guess what happened. The rich stopped buying yachts, thereby causing many blue collar types to lose their jobs.

Its been proven time and time again, that when the rate on Cap gains gets too high, you actually have a net decrease in revenue due to fewer tranactions.

On the other hand, someone earning a good salary who sees his tax increase from say 28% to 30% probably isn't going to change his behavior much, and in fact may work harder to make it up.

I've never understood why, in a capitalist sytem, people think tax on investments should be treated the same as tax on wages. You need the free flow of capital, ideas and labor. When tax rates start to affect that behavior, then you will get many unintended consequences.

Btw, I did not vote

 

[deltastrike]

Quote from Arnie:

Assuming the wealthy get most of their income from investing, I would say the rate would need to be just below that where it starts to affect their decisions.

A good example was back in the '80's they passed a "luxury" tax on yachts. Well, guess what happened. The rich stopped buying yachts, thereby causing many blue collar types to lose their jobs.

That's a sales tax, not an investment gains tax...

 

[nitro]

How the super rich avoid taxes. The article explains the most efficient way:

Will Mark Zuckerberg Ever Pay Taxes Again?

http://www.cnbc.com/id/46236916

 

[PocketChange]

Abolish all taxes.. state, federal, gas, excise, income... Eliminate all paper currency and issue every entity or person that wants to settle in dollars a us treasury debit card.

Simply Charge 1% transaction tax on all monetary exchange without exception.
Treasury deducts 1% from receiving party.

 

[sle]

(a) I suspect that unlike most posters in this thread, a larger chunk of my income falls into the upper bracket

(b) I have to admit paying taxes is pretty painful and once I am done with federal+state+city it certainly feels like I am a minority shareholder in my own life

(c) I would not mind paying even higher marginal rates if it is going to make a positive impact on peoples lives, rather then buy more aircraft carriers. Danes/Sweedes/Norvegians/Finns pay higher tax rates, but they also get free medicine/kindergarden/college and good pensions.

(d) Anywhere from 40 to 60 percent of spending goes to defence. A single stupid Predator drone costs $4.2mm - you can give pretty good education and job serach assitance to a whole city block of ghetto kids for that money.

 

[FireWalker]

I'd consider a 0% tax rate for the wealthy.

Taxation is largely for the poor and middle class. Taxes are needed for government services. The wealthy do not require those services.

But, that assumes that the world allows people to build real wealth for themselves. That would require an EDI format for banking transactions.

Promise
Promise

Deliver
Deliver

End transaction.

 

[FCXoptions]

I'd consider a 0% tax rate for the wealthy.

Taxes are needed for government services. The wealthy do not require those services.

I am not for higher taxes at all, but don't forget about roads, bridges, etc. Unless the wealthy fly their helicopter to work or work from home, they use those government services.

 

[FireWalker]

I am not for higher taxes at all, but don't forget about roads, bridges, etc. Unless the wealthy fly their helicopter to work or work from home, they use those government services.

I know that. I agree. Frequently solutions present themselves by stretching the limits.

The point is, the roads and bridges part of the budget is nothing in comparison to all the very stupid things government spends its money on. I want out of this stupidity.

 

[Martinghoul]

Tax on the wealthy should not be 0. That's reasonably easy to establish based on some basic modeling of a theoretical economy.