Millionaires Should Be Taxed 90%
America is facing two economic problems; a stalled economy and an empty treasury. A change in tax policies can resolve both issues, putting money back into the economy that is currently sequestered in large estates will speed recovery and restore our treasury.
So how can we rewrite the tax code to stimulate the economy without putting undue hardship on a small portion of the population? A starting place is to determine how much money any individual can actually spend. Let’s do some math.
What does a wealthy family need? Start with a house. The payment on a $2 million mortgage is $12,000 per month, or $144,000 per year. Next, food. Being a very successful breadwinner, Dad leads a busy life. Mom is too busy with charities to cook so they have to eat out every night. We’ll give them $200 per day or $75,000 per year. What about transportation? Our family needs a car for each adult and two more for the teens. Four cars, replaced every three years: $65,000 annually should suffice.
OK, we’re up to $290,000, but that doesn’t include the hundreds of other little expenses that they just must spend for. Vacations in Europe, Ivy league colleges for the children, etc. We’ll triple what we’ve talked about so far, and give them $1 million a year.
Here’s the point of the addition. Anything over $1 million a year is not going to be going back out to the economy. It gets trapped in an account somewhere and disappears. So, if a CEO brings home $2 million a year, that additional $1 million could have been spent by the company on 20 jobs at $50,000 a year. I’ve never met anyone who’s as valuable as 20 other educated and motivated people.
In an effort the keep some level of salary equity, create jobs and drive the economy, we need to tax these ridiculous salaries. So here’s my solution: Anyone making less than $25,000 should pay nothing. Incomes between $25,000 and $100,000 pay on a graduated scale capped at 15%. Those in the $100,000 to $500,000 range will have a maximum rate of 35% and $500,000 to $1 million will max out at 40%. Anything above $1 million should get taxed at rates as high as 70% to 90%. Similar scales can be used on corporate taxes, just start at a higher income but go up as high as 95% to keep corporate greed at bay.
I know that taxes take money out of the economy and cannot help build it. But there is a way: deductions. Deductions encourage spending, so we allow deductions for everything from corn flakes to iPods. As long as its made in the U.S., its deductible. If you should spend money on imported items, any money that stays in the country is deductible. This policy not only encourages spending, it pushes people to buy locally.
When these purchases are made, the purchaser isn’t poorer, they merely exchange liquid assets for hard assets, and while they’re at it they generate jobs. I don’t think it’s a bad idea to make a boatload of money, I just want it spent.
Photo Credit: Infrogmation