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okay so a lot of (rich, white) folks are freaking out about what a 70% tax rate on the wealthy would look like and they’re scared about it and shit (even though it’s literally what rich baby boomers already dealt with). SO LET’S DO THE MATH.
Post WWII, the tax rate peaked at 94% on annual income over $200,000 ($3mil in 2018 dollars). In the decades following, it dropped to a marginal tax rate of 70% of all income over 200k/annually (again, 2-3mil in today’s dollars, depending on year).
Here’s a thing a lot of folks don’t understand: we have a tax system in the US that only taxes money above the “bracket.” So, say the cut off for a particular percentage is 250k and you made 254k last year. The entire thing wouldn’t be taxed at the higher rate. Just the 4k.
So this doesn’t mean that all rich people would suddenly have to give up 70% of their income. Thanks to the way tax brackets work, they would only be taxed at the rate for the money above the cut off. So it isn’t a 70% flat tax—which the GOP are depending on you misunderstanding.
I and other regular joes who don’t break six digits on our annual income would never be affected by this. It’s literally adding additional marginal tax rates at higher percents for the much higher income earners.
So say the Dems get their knickers untwisted do the bold thing and create a tax rate of 70% for all income above, say, $10 million.
(keep in mind, we had our largest periods of growth and economic stability when we taxed the rich like this).
So let’s say you’re Dwayne “The Rock” Johnson. You made $65 million last year. In ONE YEAR. So that 10mil cut off is gonna hit you. 70% off everything above 10mil. That leaves you with 16.5mil. “Wow, that’s a big hit!” you think.
On paper, yeah! That’s a lot of money to just…give up in taxes! But that still leaves the Rock with nearly $20mil (considering his 10mil is also taxed at a lower rate).
That’s $20 million in net pay for a year. This is the Rock’s House, in Florida. He bought it in 2012 for $3.4 million dollars. He has, from my quick internet estimation, about $104k in property taxes yearly.pic.twitter.com/SbRT254E8y
He could buy that same home over and over every two months for a year and still have money left over to put a weight room in each property. That’s with the money he has LEFTOVER after a 70% tax rate.
Put it another way: The Rock would pay almost enough in taxes in a single year to completely solve Flint’s water crisis. He could fund the Smithsonian’s annual facilities maintenance budget for 7.5 years.
And that’s the Rock. He’s the second highest paid actor in the country (or was, in 2017). Imagine what would happen if we were able to tax ALLLLLLL billionaires, and people above 10mil/yearly at that rate.
We could fund hospitals. We could fund libraries. We could fix broken infrastructure. We could implement so many programs to ensure children don’t go hungry. And yet, somehow, we don’t, because it’s important that The Rock be able to buy his own house 7x over annually. Somehow.
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