No the rich never paid 90%

[dobieg]

A little history lesson for Ocasio-Cortez, her lightweight bud Omar and their legion of minions.

There is a common misconception that high-income Americans are not paying much in taxes compared to what they used to. Proponents of this view often point to the 1950s, when the top federal income tax rate was 91 percent for most of the decade.[1] However, despite these high marginal rates, the top 1 percent of taxpayers in the 1950s only paid about 42 percent of their income in taxes. As a result, the tax burden on high-income households today is only slightly lower than what these households faced in the 1950s.

https://taxfoundation.org/taxes-rich-1950-not-high/

 

[brothern]

A little history lesson for Ocasio-Cortez, her lightweight bud Omar and their legion of minions.

I'm confused. Ocasio-Cortez has been arguing just that,

“I think this is something that we often see too with Fox News. It’s like, ‘They want to take all your money.’ When we talk about a 70 percent marginal tax rate, it’s not on all of your income,” Ocasio-Cortez explains. “It’s on your 10 millionth and one dollar. So, after you make $10 million in one year, your dollars after that start to get progressively taxed at a much higher rate.” https://www.youtube.com/watch?v=H8ZeWDEBzoc

You article explains the exact same thing Ocasio-Cortez just did, but in longer terms.

 

[SonOfDaedalus]

A little history lesson for Ocasio-Cortez, her lightweight bud Omar and their legion of minions.




https://taxfoundation.org/taxes-rich-1950-not-high/

Most people understand that the effective rate is usually lower than the marginal rate, especially for the rich. How does this change the argument?

 

[Checkerboard Strangler]

Any discussion of the high marginal tax rate as if it is somehow separate from the entire New Deal is not constructive.
Simply reviving the high marginal rate without implementing a modernized 21st century adaptation of New Deal elements is a complete package designed to stimulate the economy if it functions as a tool to serve working class families first.

 

[Lakryte]

I'm confused. Ocasio-Cortez has been arguing just that,

“I think this is something that we often see too with Fox News. It’s like, ‘They want to take all your money.’ When we talk about a 70 percent marginal tax rate, it’s not on all of your income,” Ocasio-Cortez explains. “It’s on your 10 millionth and one dollar. So, after you make $10 million in one year, your dollars after that start to get progressively taxed at a much higher rate.” https://www.youtube.com/watch?v=H8ZeWDEBzoc

You article explains the exact same thing Ocasio-Cortez just did, but in longer terms.

/thread. Thank you next.

 

[Lutherf]

So, let me tell you about people that make $10 Million a year. The generally don't get a W-2 with $10,000,000.00 in box 1. Their income is generally from wages, investment, and business income. Now, if I happen to have $10 Million in income and I know that I'm going to be taxed at 70% on my ten millionth dollar then the IRS will never see that dollar. I will never have constructive receipt of that dollar while it's subject to tax at that rate. That dollar might show up as an ordinary and necessary business expense or it might show up as part of a real estate deal that won't turn a profit for 5 years but it damned sure won't show up as taxable income.

These idiots that keep proposing absurd tax rates never seem to understand that people with significant financial resources tend to have LOTS of flexibility in what to do with those resources. They aren't living paycheck to paycheck so if they decide that they can manage without pocketing a spare $2-4 million during the year then they'll simply forego or defer that portion of income.

 

[Cramer]

Here is a decent article on the subject:

https://slate.com/business/2017/08/the-history-of-tax-rates-for-the-rich.html

Progressives should stop fixating on the tax rates from 60 years ago. “All in all, the idea that high-income Americans in the 1950s paid much more of their income in taxes should be abandoned. The top 1 percent of Americans today do not face an unusually low tax burden, by historical standards.”

I’m not convinced. Effective tax rates on 1 percenters may not have fallen by half, as some on the left might be tempted to imagine. But they are down by about 6 percentage points1 at a time when the wealthy earn a vastly larger share of the national income. That drop represents a lot of money. Moreover, as Greenberg admits, tax rates on top 0.1 percent have fallen by about one-fifth since their 1950s heights. That rather severely undercuts the idea that taxes on the wealthy haven’t fallen “much.”

Another factor to consider. CEO pay, compared to their average worker's pay, was generally about 30-40 times more.

Today, it is 300-400 times more, and up to 1000 times more depending on the industry. What caused that? Are CEO's today, really that much better than CEO's of yesteryear?

 

[Lakryte]

So, let me tell you about people that make $10 Million a year. The generally don't get a W-2 with $10,000,000.00 in box 1. Their income is generally from wages, investment, and business income. Now, if I happen to have $10 Million in income and I know that I'm going to be taxed at 70% on my ten millionth dollar then the IRS will never see that dollar. I will never have constructive receipt of that dollar while it's subject to tax at that rate. That dollar might show up as an ordinary and necessary business expense or it might show up as part of a real estate deal that won't turn a profit for 5 years but it damned sure won't show up as taxable income.

These idiots that keep proposing absurd tax rates never seem to understand that people with significant financial resources tend to have LOTS of flexibility in what to do with those resources. They aren't living paycheck to paycheck so if they decide that they can manage without pocketing a spare $2-4 million during the year then they'll simply forego or defer that portion of income.

So if the marginal tax rate is 37% not 70%, rich people are less able to hide that 10 millionth dollar? Not sure what the takeaway you are trying to get at it. The wealthy will try to hide a portion of their income regardless of the top marginal rate.

 

[Lutherf]

So if the marginal tax rate is 37% not 70%, rich people are less able to hide that 10 millionth dollar? Not sure what the takeaway you are trying to get at it. The wealthy will try to hide a portion of their income regardless of the top marginal rate.

There is incentive to "disappear" that dollar but only half as much as if the rate is 70%.

 

[Lakryte]

There is incentive to "disappear" that dollar but only half as much as if the rate is 70%.

I'm not sure such a 1:1 correlation exists. The fact that when the marginal tax rates were higher effective tax rates were also higher suggests otherwise.

For example, as an earlier poster noted, (effective) tax rates on top 0.1 percent have fallen by about one-fifth since their 1950s heights.

 

[Mach]

They aren't living paycheck to paycheck so if they decide that they can manage without pocketing a spare $2-4 million during the year then they'll simply forego or defer that portion of income.

I've never seen someone so scared of taxing the wealthy, instead of taxing the middle class.

- if the wealthy don't pay it, you will (middle class, upper-middle class, working class, and poor..but poor don't really pay).
- Most comprehensive tax plans from Democrats also include changes to capital gains rates as well (hopefully marginal brackets too, so retirement folks with modest incomes aren't hurt)
- if someone earns $10M, and presumably already has a fortune, this may not affect them as much, but what it does affect is any trying to amass that wealth as they earn $1M, $2M, $3M, etc.

I mean, why not just sell everything you own and give it to me, save you the trouble of voting Republican.

 

[ttwtt78640]

There is incentive to "disappear" that dollar but only half as much as if the rate is 70%.

The reason for 80? thousand pages of federal income tax code is to let that 'disappearing' happen quite legally.

 

[poweRob]

I'm confused. Ocasio-Cortez has been arguing just that,

“I think this is something that we often see too with Fox News. It’s like, ‘They want to take all your money.’ When we talk about a 70 percent marginal tax rate, it’s not on all of your income,” Ocasio-Cortez explains. “It’s on your 10 millionth and one dollar. So, after you make $10 million in one year, your dollars after that start to get progressively taxed at a much higher rate.” https://www.youtube.com/watch?v=H8ZeWDEBzoc

You article explains the exact same thing Ocasio-Cortez just did, but in longer terms.

 

[Bullseye]

A little history lesson for Ocasio-Cortez, her lightweight bud Omar and their legion of minions.




https://taxfoundation.org/taxes-rich-1950-not-high/

That's happened repeatedly. Most high-income individuals didn't get there by being stupid or wasteful. A primary taxation rule is the if you want less of something tax it. We want to curtail smoking - we tax tobacco. We want people to buy electric cars we give tax credit. Most high earners have options to rearrange their finances to lower their tax liability.

 

[poweRob]

So, let me tell you about people that make $10 Million a year. The generally don't get a W-2 with $10,000,000.00 in box 1. Their income is generally from wages, investment, and business income. Now, if I happen to have $10 Million in income and I know that I'm going to be taxed at 70% on my ten millionth dollar then the IRS will never see that dollar. I will never have constructive receipt of that dollar while it's subject to tax at that rate. That dollar might show up as an ordinary and necessary business expense or it might show up as part of a real estate deal that won't turn a profit for 5 years but it damned sure won't show up as taxable income.

These idiots that keep proposing absurd tax rates never seem to understand that people with significant financial resources tend to have LOTS of flexibility in what to do with those resources. They aren't living paycheck to paycheck so if they decide that they can manage without pocketing a spare $2-4 million during the year then they'll simply forego or defer that portion of income.

I guess you don't know what you are arguing. You seem to think that those proposing 70% - 90% tax rates on the upper levels of income are hoping that they bank all that money in tax receipts. Well... they don't think that. Logical people know just what you said and know that such high tax rates encourages reinvestment rather than cashing out and sending the $'s off shore to hide from the IRS. Those reinvestment $'s get back into the economy and get taxed multiple times as it changes hands as sales tax from purchases and as income tax from the paychecks that that reinvestment hits and so on and so on... etc.

 

[Perotista]

A little history lesson for Ocasio-Cortez, her lightweight bud Omar and their legion of minions.




https://taxfoundation.org/taxes-rich-1950-not-high/

This also

https://boards.straightdope.com/sdmb/showthread.php?t=665814

 

[Greenbeard]

Most people understand that the effective rate is usually lower than the marginal rate, especially for the rich. How does this change the argument?

I'm not sure most people do understand that. At least judging by the reactors AOC has been drawing out of the woodwork.

 

[Lutherf]

I'm not sure most people do understand that. At least judging by the reactors AOC has been drawing out of the woodwork.

In what world is it "fair" to tax ANY dollar at 70%? That isn't "fair" or "reasonable" whether it's the first dollar or the last one.

 

[Greenbeard]

In what world is it "fair" to tax ANY dollar at 70%? That isn't "fair" or "reasonable" whether it's the first dollar or the last one.

The world that existed from 1932-1980. MAGA!

 

[independentusa]

A little history lesson for Ocasio-Cortez, her lightweight bud Omar and their legion of minions.




https://taxfoundation.org/taxes-rich-1950-not-high/

https://bradfordtaxinstitute.com/Free_Resources/Federal-Income-Tax-Rates.aspx
Actually the highest tax rate ever was according to this article was 94%.