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Archive for March, 2011

Back in the days of Eisenhower and Kennedy, there was a top tier tax bracket for the super rich of somewhere beyond 90%. When Reagan took command in 1981, he cut that percentage by over half, with enough loopholes to insure that the filthy rich with efficient lawyers got off even better.

The time has come to readdress the concept of taxing the super rich at a high rate when they come to have a disproportionate influence on society and commerce. I think the key to making this tangible to the American public is to put the benchmark for excessive wealth at the marker of 1000 families. Put it in human terms, so rationality finally trumps rhetoric.

Once someone goes beyond earning as much as 1000 families, I think it’s fair to again tax their income at about 72%. Perhaps the line for this should be $35,000 a year for a family, so $35 million for a wealthy bread winner could be the line above which these rates are applied.

American history confirms that with higher top-tier tax rates such as these, our economy does better. This encourages the super rich to put money back into their businesses, creating more jobs. On the other hand, the current system promotes risky speculation which inflames the boom and bust cycle of our economy.

So not only is a higher tax for that top one percent of Americans more fair, it also improves economic stability and trims unemployment.

A harder sell would be the equivalent taxation perspective for massive estates. If their wealth exceeds the wealth of 1000 families – the worth of their house, car, savings, college funds – then the estate tax should be 60% or above. This could be for a net worth of beyond $400 million, assuming a stable family has $400,000 in assets.

Of course there should still be plenty of tax deductible donations that can offset some of these taxes; philanthropy in America is needed on so many levels.

And as part of restoring logic to America’s tax codes, the “1000 family” tax bracket should go hand in hand with going back to treating stock dividends as regular income rather than giving them away at 15%. Couple that with closing the offshore tax havens that allow Exxon/Mobil to pay NO federal income tax on $42 billion in profits last year, and paying down the deficit can be started without slashing social programs.

As a species, we’ve got to get beyond greed as the primary incentive for our actions. To evolve, compassion, logic, and fair play have to lead our focus towards the future.

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