Should rich people pay higher taxes? | The Tylt
Raising taxes, once the most taboo subject in American politics, has been gaining popularity at a shocking rate. Yet only for one specific group of people—one percenters. Liberal Democrats like Alexandria Ocasio-Cortez swept into power on the back of promises to work to take wealth back from a tiny portion of the population and help ease the country's financial inequality. But some centrists like Howard Schultz think this is unfair and taxes should be equal for all. What do you think?
Should rich people pay higher taxes?
According to a Politico survey, 76% of registered voters believe the richest Americans should pay higher taxes while 70% of Americans who answered a Fox News poll favored raising taxes on people who earn more than $10 million.
...“There is a deep wellspring in terms of perception of unfairness in the economy that’s been tapped into here that either didn’t exist five years ago or existed and had not had a chance to be expressed,” said Michael Cembalest, chairman of market and investment strategy at JPMorgan Asset Management who has studied the latest tax proposals. “This is quite a moment in American economic history where all of a sudden in a matter of months this thing has kind of exploded like this.”
Alexandria Ocasio-Cortez has been at the forefront of the movement for more proportional taxes. Ocasio-Cortez has proposed raising the tax rate to 70% on every dollar people earn over $10 million. While many conservatives have claimed this plan is far too extreme, the Washington Post explains this would actually be a move back to more historical tax rates.
John F. Kennedy (D) proposed cutting the top tax rate from 90 to 70 percent, which took effect in 1965. That 70-percent rate — the level proposed by Ocasio-Cortez — stayed in effect through 1981, when Ronald Reagan (R) cut rates to 50 percent. Reagan further reduced the top marginal rate to 28 percent in 1988 (and even taxed capital gains at the same rate as wage income).
From the perspective of the 1960s and 1970s, Ocasio-Cortez’s proposed rate is practically the gift to the wealthy. In today’s dollars, 70 percent took effect when wages exceeded $1.35 million in 1965 ($100,000 then) and $475,000 in 1981 ($108,300). She’s proposing $10 million.
At the World Economic Forum, where many of the world's wealthiest citizens gathered to discuss the economy, historian Rutger Bregman made news when he confronted the crowd of one percenters and demanded they acknowledge that they, for the most part, do not pay their fair share of taxes.
“Almost no one raises the real issue of tax avoidance and of the rich just not paying their fair share. It feels like I’m at a firefighters’ conference, and no one is allowed to speak about water,” he said, as the room grew palpably uncomfortable.
Some billionaires like Howard Schultz have been quick to criticize the increase in taxes, saying it would be unfair. Per Politico:
Democrats are facing some backlash from conservatives, corporate America and moderates like former Starbucks CEO Howard Schultz over their embrace of higher tax rates on the rich and corporations. Shultz recently called Warren’s wealth tax “ridiculous.” Former New York City Mayor Michael Bloomberg, a potential moderate Democratic candidate in 2020, likened it to policies in socialist Venezuela.
New York Governor Andrew Cuomo agreed, voicing concern that a higher tax rate would drive wealthy Americans to places with more forgiving tax policies.
Cuomo said the super-wealthy in New York – accounting for 1 percent of tax filers – end up paying 46 percent of the personal income taxes the state collects each year.
“Tax the rich. Tax the rich. Tax the rich. We did that. God forbid the rich leave," Cuomo said of a mobile group of people who can more easily switch residences to states with lower state and local tax levels.
Most of these people feel they have earned their money on their own and should not be responsible for paying more than others. Per Esquire:
Like many other hugely successful people, Schultz believes he earned every ounce of what he has through superior skill and work ethic—with no help from the design of our political economy—and any attempt to get him to contribute more to commonwealth programs through taxation are literally "un-American." That's what he called Medicare For All, which enjoys 56 percent support nationally in a recent poll. In other surveys, it's garnered 70 percent support. He dismissed Alexandria Ocasio-Cortez's proposal for a 70 percent top marginal tax rate (45 percent support in a new poll) and called Warren's plan for a wealth tax of 3 percent on $1 billion or more and 2 percent on $50 million as "ridiculous."