Thursday, April 09, 2009

Let's Return to Progressive Taxation

People who hate taxes and hate government must hate roads and schools and libraries and police and courts, not to mention certified foods and medicines and a whole host of other hallmarks of a civilized society today. The issue is not whither taxes, but whither unfair taxes.

From the 1930s until the 1980s, the United States had a progressive tax system that did a mildly good job of undoing the vast shift toward income and wealth inequality of the late 19th century through the 1920s. Under that great red revolutionary, Dwight David Eisenhower, the top marginal tax rate was 92%.

So why does the political marketplace of ideas accept as dogma that anything worse than Reagan and Bush rates of 28% and 35% are sacrosanct? Why should there be just three rates topping at little more than a third, when the revenue they produce simply fails to pay for a good health care and retirement system for all (not to mention the odd war our country must somehow always be fighting)?

Given that 20% of the people own 80% of the nation's assets, shouldn't they who are more able, contribute substantially more to a society that has made their riches possible?

These are rhetorical questions. President Obama (how nice that still sounds ...!) is being overly timid in suggesting that rates merely return to President Clinton's 39.6%. That's not how a changed America will come about.

(By popular acclaim, I am returning to my clarifications concerning the revolutionary agenda I proposed, which I admit was never my wholly original idea. In the next few posts I shall be attempting to review the points in greater detail.)


Joan19 said...

Taxation is a highly complex subject, covering not just individuals but also corporations and sales, and covering both earned and unearned income. Simply saying that people should pay x% is insufficient in isolation.
Perhaps one should look to, eg, the insurance business for a model; people pay more to have more assets protected; those with more assets stand to lose more if not protected, therefore should pay more, and the more they have the more they should pay.

Anonymous said...

Alas, Joan19, "progressive taxation" is precisely what you propose, a set of rates that increase according to income. The author is obviously referring to the top rate.


Anonymous said...

A progressive income tax is good! The only problem with it is the preponderance of "write-offs" that only those who have a lot of income are able to make use of.

heartinsanfrancisco said...

I am always interested in your views, but don't know enough about taxation beyond its inevitability along with death to make an intelligent comment.