Should We Bring Back The 90% Top Tax Rate?

OPS:  At minimum, roll back the Reagan tax cuts

Should We Bring Back The 90% Top Tax Rate?

How many stories have we heard in recent years of CEO’s and other executives looting, stealing, polluting and wreaking general havoc? The incentive to loot a company’s pension funds is money. The incentive to outsource our jobs is money. The incentive to deny needed treatments to an insured patient is money. The incentive to pollute our rivers and air is money.

Generally the incentive to lie, cheat and steal is money. This is especially true in the corporate world where the reason for … well, everything … is money. This is normal, and can be kept in check. But the temptation that pushes many over the line is not just money, it is the possibility of the big, humungous jackpot. And that is what we have today.

It used to be that you could make, why, millions of dollars if you worked hard, built a company, invented something important, or had amazing talent. But today mere millions is for chumps. Today you can loot a fund, rig an energy market, forward-run stocks or threaten to bring down an economy and end up with a quick payoff of billions.

When excessive, massive paydays are possible, it opens the door to overwhelming greed and a resulting compromising of principles.

There is a way to prevent the destructive behavior we have been seeing from the top. People won’t have an incentive to cheat and steal if they can’t get the huge jackpot from the proceeds. Let’s limit the possibility of collecting a vast and fast return. The vast and fast return is the motivator, so take it out of the equation.

DaveJ :: Should We Bring Back The 90% Top Tax Rate?

The way to do this is with a very steep progressive income tax with a very high tax rate on income above a certain level. So suppose we set the top tax rate back to 90% for people making over, say $3 million. $3 million a year is nothing to sneeze at, so there is still plenty of reason to do what you do to make a lot of money. And if you pass $3 million you still take home $100K for every million more you make, which is also nothing to sneeze at. But there is no longer a reason to engage in quick-buck schemes. Instead there is plenty of reason to build a solid business over time, and hopefully eventually build a fortune of hundreds of millions. As I said, nothing to sneeze at.

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