Taxing the Rich to the Extreme

by Sal on February 24, 2009

in Economy,Politics

Currently, the highest tax bracket is for those making over $250,000.  Under the Bush tax cuts, they are taxed at a rate of 35% (still too high in my opinion).  This figure will increase to 39% when the Bush tax cuts expire, or when Obama raises them, whichever comes first.  Yet there are elected Democrats who believe that giving nearly 40% of one’s income to the government is not enough.  Congressman Jerry McNerney (D-CA) is one such Democrat.  From Instapundit, via the Anchoress:

When I got my time with him, I explained to him that even people who make $150k in Northern Cal. are not “rich” and should not be taxed as if they were. (A 1400 sq ft, 40 year old home here goes for over half a million, even after the housing slump. Then you add in real estate taxes, state income taxes, 10% sales tax, gas prices, utility costs, etc.) I also expressed my concern that about half the people in the country now pay no income taxes, so there is overwhelming incentive for them to keep voting for democrats and therefore higher taxes for the rest of us. He told me that he thought tax rates should go up for the very rich and that the top marginal tax rate should be 90%. I couldn’t believe what I was hearing, so I asked in a voice that many in the room could hear if he really meant 90%, and he said yes.

It may seem unrealistic that the top marginal tax rate could be 90%, but it has happened before.  Prior to the Kennedy tax cuts, the top marginal rate as enacted by Roosevelt was over 90%.  Even Kennedy’s Tax cuts only brought the top marginal rate down to 70%, where it remained until Reagan cut it to 28% in the early 1980s.  It is clear that the Democrats want to return us to the glory days of Roosevelt — the days of endless Depression and unemployment consistently above 15%.  The way the market has been going since the beginning of Obama’s term, that may not be out of the question.

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