Sin taxes on high paychecks results in smaller government and a better economy
Feral
Reposting a bit of this, but during the Eisenhower era...
Despite the rich paying as much as 70% in income taxes on their highest earnings the economy still grew, something that seems to be lost down the memory hole. High taxes on the wealthy and economic growth - who'd a figured???
The thing is, this is painted as a money-grab, whereas it should be looked at a sin tax. The right-wing pundits and politicians claim that the government wants $70million from a $100million/year salary. But that's not how it actually works. It you tax at 70% for every $ earned over $2,000,000/year (for example), then business-savvy Boards of Directors will pay out $2,500,000/year maximum. The rest stays in the company.
It's a sin tax: you tax what you want to discourage, which in this case is the theft of profits from the company. But not only are high paychecks stealing from the company, its workers, and its shareholders, but it is also stealing from the economy. For every dollar that poor and middle class people get, *every* dollar goes back into the economy, through the purchase of goods, and the paying of taxes. Poor-/middle-class people save next to nothing - it all goes back into circulation. Give rich people cheap money taxed at 30% and only that 30% plus maybe another 20% goes back into the economy through purchases. The rest - 50% of their pay - gone overseas or in trust funds or foundations.
So with this 70% sin tax, government makes less off of rich people because they get their salaries limited, but the shortfall is recovered because poor- and middle-class people will then be paying taxes on their salaries and sales tax, gas tax, etc.
Finally, putting money into the hands of the poor- and middle-classes suddenly eliminates the need for unemployment checks. The government takes in the same amount in overall taxes, but puts out less in benefits,
Thus, a high sin tax on the rich (call it a "fine" if you like) results in smaller government. Imagine that.
Reposting a bit of this, but during the Eisenhower era...
Despite the rich paying as much as 70% in income taxes on their highest earnings the economy still grew, something that seems to be lost down the memory hole. High taxes on the wealthy and economic growth - who'd a figured???
The thing is, this is painted as a money-grab, whereas it should be looked at a sin tax. The right-wing pundits and politicians claim that the government wants $70million from a $100million/year salary. But that's not how it actually works. It you tax at 70% for every $ earned over $2,000,000/year (for example), then business-savvy Boards of Directors will pay out $2,500,000/year maximum. The rest stays in the company.
It's a sin tax: you tax what you want to discourage, which in this case is the theft of profits from the company. But not only are high paychecks stealing from the company, its workers, and its shareholders, but it is also stealing from the economy. For every dollar that poor and middle class people get, *every* dollar goes back into the economy, through the purchase of goods, and the paying of taxes. Poor-/middle-class people save next to nothing - it all goes back into circulation. Give rich people cheap money taxed at 30% and only that 30% plus maybe another 20% goes back into the economy through purchases. The rest - 50% of their pay - gone overseas or in trust funds or foundations.
So with this 70% sin tax, government makes less off of rich people because they get their salaries limited, but the shortfall is recovered because poor- and middle-class people will then be paying taxes on their salaries and sales tax, gas tax, etc.
Finally, putting money into the hands of the poor- and middle-classes suddenly eliminates the need for unemployment checks. The government takes in the same amount in overall taxes, but puts out less in benefits,
Thus, a high sin tax on the rich (call it a "fine" if you like) results in smaller government. Imagine that.
posted by batguano at 6:59 PM
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