The US Needs a Steeply Progressive Tax Structure

March 20, 2009 by mike.

A top tax rate that is essentially confiscatory forces the “captains” of the economy to think about how to turn corporate profit back into tax-exempt infrastructure, into solid business assets instead of diverting corporate profit into “retention” bonuses.

The lure of wrecking your business or even the national economy is strong if you can walk away with millions and get to keep it. We need to help folks avoid the temptation to enrich themselves at the expense of the larger community by instituting a top tax rate of 75 to 90%. There is much less interest in wrecking the corporation or national economy if the millions or billions you “earn” along the way are gobbled up by the tax man.

Michael Hitlik gets it. Read below.

clipped from www.latimes.com The belief that the wealthy are worthy is waning The notion that the poor always will be with us has been ingrained in our culture ever since the sermons of Moses were set down by the anonymous author of Deuteronomy. The financial crisis of the present day raises a rather different issue, however: What should we do about the rich? A bit of history will be useful here. The original case for a progressive income tax — that is, one levied disproportionately on larger incomes — was based less on raising revenue for the state than breaking up concentrations of wealth, inherited and otherwise. The nation’s Founding Fathers considered these to be undemocratic — markers of “an aristocratic society, not a free and virtuous republic,” as the tax-law expert Dennis Ventry has written. There’s also a social value in suppressing income inequality. In a country with only a slightly less ingrained tradition of civility than the United States, the AIG affair would provoke rioting in the streets.

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