Reply #26: Marginal tax rates are one confused issue. [View All]

[LimpingLib]

They always have been full of loopholes.

The rates were 90% for a very long time and the economy did fine. They were in the 70%-77% range for almost as long and the economy REALLY did fine , infact once they started going further down farther from the 75% range did the economy start to sputter , wages went down , and inflation at times went out of control.

During those days and this day we have a tax system where marginal rates are confused with taxation. The top 400 income earners pay roughly half their marginal rate due to LOOPHOLES and the like. Some of the most wealthy corperations pay either 0% or near that in taxation.

WE could leave the marginal rates exactly the same or slightly smaller , then end all loopholes, corperate welfare, etc. and bring in about a half a trillion more dollars a year.

WE could raise the top tax rate to 50% but leave all loopholes and only bring in around 1/8th that.