You Can’t Tax “The Rich” Today As If It Was 50 Years Ago!

Recently on Yahoo Finance’s Daily Ticker (formerly called Tech Ticker, wonder how much they paid a marketing guru for the new name?!) there was an article taking the stand that a weaker Dollar is good for the American economy and the Fed should do QE3 and beyond. MasterPo isn’t going to comment on the shear stupidity of this argument.

But as with many Yahoo Finance articles it is the reader comments that are worth noting. In particular on unnamed person commented in part quote:

“Start trying to balance the budget. Start now. Tax the rich at the rate of 50 years ago.”

Sadly, this isn’t a new idea. It’s a sentiment often expressed.

But, if we’re going to use the tax rates of decades ago let’s be complete.

Yes, taxes on “the rich” were highly 50-60-70 years ago.

But…

There were also significantly more deductions, credits, write-offs, allowances, shelters etc. available too. So the actual amount of income taxed at these higher rates was much less than commonly thought.

Bringing make the tax rates of 50-60-70 years ago but without the same deductions etc. would result in a significant tax increase! And given the levels of income that today is considered “rich” MasterPo is sure quite a few people would get a shock to see now they are taxed as “rich” at these higher levels!

You can’t pull one man up by bringing down another.
Never happens.
Never will.

You end up with two people down.