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UP / Thumb of Michigan | Maybe "something" should be done about the wealth disparity in the US. I don't know how to define it, and how to implement it though.
I'm of the opinion that trying to solve the issue through taxation (and no offense to Tom, he was a great man and the USA was darn lucky to have him on our side) I just don't feel progressive taxes are the way. Theres a long history of trying to make it work here, and its all mirrors and a fair amount of smoke. Before anyone in DC gets a chance to vote on any tax legislation, the deductions to get out of paying that tax rate are already decided.
I have friends who read and believe everything that comes out of "Occupy Democrats" or "The other 98%" . Try to explain to them sometime that the 91% tax rate was a farce, that no one paid that. Try to then explain effective tax rates. Its just not going anywhere. They aren't dumb people by any means on many topics- its just that its an easy topic to get the wrong information on, and its believable to some I guess. And its probably just as easy to find the wrong information among conservatives.
Its somewhat interesting to look back at out history of taxation. I think anyway. I don't know if unintended consequences fits every period, but I think it shows up in some. https://www.fidelity.com/learning-center/personal-finance/history-us...
So whats the correct answer? Flat tax is a non starter in my mind. Its a tax break for the wealthy thats going to hit the rest of us too hard. If limiting wealth creation is the goal, that one won't work.
So, theres Fair Tax. Might be a better choice over flat? Probably. Heres one debate on it: https://buddycarter.house.gov/news/documentsingle.aspx?DocumentID=10...
So, ultimately: over the years, when these topics come up, I try to look back and find out what effective tax rates were through history. Its always a dead end. I'm sure the data is there, I just don't use the right search tool I guess. I'm only bringing it up because I believe that progressive tax rates have never worked to penalize the wealthy, if thats what the goal is. From what little bit I can find, the effective tax rates among the top 10 or 20% has held pretty constant- but again, I don't have any good data to back that statement up at all. Or none thats been from a good source anyway. If my assumption about effective tax rates is in fact true, then its not working to limit wealth creation.
It was mentioned earlier about company take overs, whether they were of a hostile nature or not, as being the source of our problems . Might be a contributor. Theres also a sentiment that if anyone has achieved great wealth, they've done it dishonestly. I don't believe either of those are an accurate depiction. But, lets say I'm wrong. Then solve the issue through legislation, not through the tax codes. Thats what happened with monopolies.
No matter what, I feel our tax system could use some overhauling. Maybe not throwing the entire thing out, but simplification would be great. I think there are likely palatable ways to limit the spread of wealth between the haves and the have nots, but its not through taxes. And its going to be real tricky to do, a lot harder than some think. Not because of the power and influence of the wealthy as much as its the general consensus (or I think it is) that we're the greatest model of capitalism on the planet. Its hard to talk out of both sides of our mouths.
Edited by pat-michigan 5/4/2025 07:36
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And another thing.. Trumps tax cuts 49% benefit the top 5% of earners
