QUOTE
Why Democrats are afraid to raise taxes on the rich
Could it have something to do with the recent affection of hedge-fund managers for the Democratic Party?
By Robert Reich
Salon
Oct. 25, 2007 | New data from the Internal Revenue Service show that income inequality continues to widen. The wealthiest 1 percent of Americans earn more than 21 percent of all income. That's a postwar record. The bottom 50 percent of all Americans, when all their wages are combined, earn just 12.8 percent of the nation's income.
Considering the magnitude of challenges ahead for America, it seems only reasonable that taxes should rise on the wealthy. Taxing the super-rich is not about class envy, as conservatives charge. It's about the nation having enough money to pay for national defense and homeland security, good schools and a crumbling infrastructure, the upcoming costs of boomers' Social Security (the current surplus has masked the true extent of the current budget deficit, but it won't for much longer) and, hopefully, affordable national health insurance. Not to mention the trillion dollars or so it will take to fix the Alternative Minimum Tax, which is now starting to hit the middle class.
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The biggest emerging pay gap is actually within the top 1 percent of all earners. It's mainly a gap between corporate CEOs, on the one hand, and Wall Street financiers -- hedge-fund managers, private-equity managers (think Mitt Romney) and investment bankers -- on the other. According to a study by University of Chicago professors Steven Kaplan and Joshua Rauh, more than twice as many Wall Street financiers are in the top half of 1 percent of earners as are CEOs. The 25 highest-paid hedge-fund managers are earning more than the CEOs of the largest 500 companies in the Standard and Poor's 500 combined. While CEO pay is outrageous, hedge-fund and private-equity pay is way beyond outrageous. Several of these fund managers are taking home more than a billion dollars a year.
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What's fair? I'd say a 50 percent marginal tax rate on the very rich, meaning those earning over $500,000 per year. I'd also suggest an annual wealth tax of one-half of 1 percent on the net worth of people holding more than $5 million in total assets. Can't be done, you say? Well, the highest marginal tax rate under Republican Dwight Eisenhower was 91 percent. It dropped under John Kennedy to the 70 percent range. You say the rich will leave the country rather than face a marginal tax of 50 percent? Let them, and take away their citizenship.
Complete article at LINK
Could it have something to do with the recent affection of hedge-fund managers for the Democratic Party?
By Robert Reich
Salon
Oct. 25, 2007 | New data from the Internal Revenue Service show that income inequality continues to widen. The wealthiest 1 percent of Americans earn more than 21 percent of all income. That's a postwar record. The bottom 50 percent of all Americans, when all their wages are combined, earn just 12.8 percent of the nation's income.
Considering the magnitude of challenges ahead for America, it seems only reasonable that taxes should rise on the wealthy. Taxing the super-rich is not about class envy, as conservatives charge. It's about the nation having enough money to pay for national defense and homeland security, good schools and a crumbling infrastructure, the upcoming costs of boomers' Social Security (the current surplus has masked the true extent of the current budget deficit, but it won't for much longer) and, hopefully, affordable national health insurance. Not to mention the trillion dollars or so it will take to fix the Alternative Minimum Tax, which is now starting to hit the middle class.
...
The biggest emerging pay gap is actually within the top 1 percent of all earners. It's mainly a gap between corporate CEOs, on the one hand, and Wall Street financiers -- hedge-fund managers, private-equity managers (think Mitt Romney) and investment bankers -- on the other. According to a study by University of Chicago professors Steven Kaplan and Joshua Rauh, more than twice as many Wall Street financiers are in the top half of 1 percent of earners as are CEOs. The 25 highest-paid hedge-fund managers are earning more than the CEOs of the largest 500 companies in the Standard and Poor's 500 combined. While CEO pay is outrageous, hedge-fund and private-equity pay is way beyond outrageous. Several of these fund managers are taking home more than a billion dollars a year.
...
What's fair? I'd say a 50 percent marginal tax rate on the very rich, meaning those earning over $500,000 per year. I'd also suggest an annual wealth tax of one-half of 1 percent on the net worth of people holding more than $5 million in total assets. Can't be done, you say? Well, the highest marginal tax rate under Republican Dwight Eisenhower was 91 percent. It dropped under John Kennedy to the 70 percent range. You say the rich will leave the country rather than face a marginal tax of 50 percent? Let them, and take away their citizenship.
Complete article at LINK
Emphasis added. I love this guy, he makes it easy to understand.