Taxing Millionaires and Billionaires

At one point our highest income tax rate was 90%,it was a rate reserved for the uber rich, however there were ways around that rate and few if any paid in 90%. The rich hired tax attorney lobbyists and bought off politicians, income was redefined as ordinary income and investment income (or some such term,) tax loopholes and tax shelters were created in the tax code. Salaries and wages were considered ordinary income. Rents, royalties, stock options and dividends were non ordinary income and at the time for instance, 85% of dividend income was exempt. The Rockerfellers come to mind.

When the original Rockerfeller died he split his massive fortune up between his many sons (4 if not mistaken, one is currently a US senator from W Va.). They didn't receive vast sums of cash, they each received millions of shares of common stock. Nelson Rockerfeller who was Ford's VP, had such a stock fortune, he was getting $500,000 a day--A DAY-- in dividend payments!

This is the game that is played in Washington. The stupid Left actually believes Obama wants to raise taxes on the rich, and give it to the poor. It will never happen even if the rates were raised to 100%. A loophole would be created for the rich. In turn the rich would be expected to be political donors.

Do consider this though, taxation from all sources above 50% will not sustain an economy, eventually the system will collapse, for proof look no further than the former Soviet Union.

Say you do make $1,000,000 per year in your own business and you pay 90% of it in taxes. Your actual net then is $100,000. Why be in business? Why put up the initial capital, work the endless hours, and take the RISK ? Success and profits aren't guaranteed. Why not just get a job working for a $100,000 salary, with a lot less stress, personal risk, and chances are a 40 hour work week.

The Left will argue, that the uber rich would still make unseemly amounts because of their vast wealth. Yes $500,000 in daily dividends is a good point, but capital is not eternal. It erodes, depletes, wears out, and falls apart. Eventually the well runs dry, the forest is cut, and equipment and tools need to be replaced. A
50%+ tax rate puts the golden goose on a glide path with mother earth. A higher rate makes the descent steeper, and steeper until the goose is in a complete nose dive. And as children we all learned the lesson of what happens when the goose that lays the golden eggs is killed.

Every pyramid has a point. From that top level jobs are derived, inventions are made practical, and incentive is created,-- level everything and mediocrity sets in.

We marvel at Asian students, year after year they are the valedictorians. But is it rote learning or are they functionally intelligent? We are told China has surpassed us in science and math education. Why then does totalitarian China have to practically  reverse engineer everything and steal technology? If they are soooo smart, why aren't they leading the world in invention and innovation? China's system is keeping them down. Nobody but the ruling oligarchy are prospering. China chose the Soviet model, not the pre Obama US model, and the results will be the same. Obama and the Left are trying to impose a failed system on America. By taxing the rich, the incentive to create and desire to suceed is killed off.


This brings to mind the current situation of who is currently (currently)  the debtor nation and who is the creditor nation. Without getting into the weeds on that issue, let me just say, it isn't written that the USA must take a loss on every trade deal. Washington has been selling us out for decades, that's why we owe so much.

If we lose our entrepreneurial spirit, then we will sink into permanent debtor status obilvion. No other nation will be the chumps we have been.

Steve