Proposition 40, which will be on the ballot in November, would impose a one-time, 5% tax on California’s 200 billionaires,
These fucks will do anything to avoid paying taxes…
with 90% of the revenue from the proposed measure going toward the state’s health care program and 10% going toward education, food assistance, and administration. Brin, with a net worth of nearly $260 billion, could owe about $13 billion as a result of the tax.
Can’t be contributing to “socialism” I guess? Get some of that $260 billion liquid and pay up, dickhead.
Bring back pre-Reagan tax rates on the rich.
Those 1950s glory days that Republicans keep harkening back to involved Ike, a Republican president, taxing the [very] wealthy
like 52% (fake viral posts say 90%).at a rate of around 90%.EDIT: Corrected based off of comments. The 52% rates seem to be more common among the “wealthy” at the time, but in comparison to billionaires today, the 90% rate would be more accurate. The “fake viral posts” is in reference to memes that make it sound like every person who counted as “wealthy” were taxed at 90%. I realize I could have written all of that more clearly.
Is it fake viral posts, or just people not understanding how marginal tax rates work or how they differ from your effective tax rate again? The highest tax rate did cross over 90% at the tail end of WWII, but very few people actually had to pay taxes at that rate, and even then, their effective tax rate would have been much lower.
Edit: Just to illustrate, this site has historical tax rates for the period in question. For the sake of simplifying then math, I’m doing this assuming you only paid 3% income tax on income up to $100,000/year, and 94% on earnings above that with the surtax. Source for the income numbers is straight out of my ass, but it doesn’t really matter, as it’s only to illustrate the point. So, say that year, you managed to make $110,000. You would pay 3% on your first $100,000 in taxable income, and 94% on the remaining $10,000 you earned above that, making your effective rate 11.27% across your whole income, with a tax liability of $12,400. You can have both lower effective tax rates and higher marginal tax rates for your highest earners without either one negating the truth of the other.
It’s worth noting that the tax rate might be 90, but the effective taxation is a much lower percentage of the earnings.
Corporate Tax is calculated after costs, while personal tax is calculated more or less directly on earnings and then you need to cover your costs from whatever remains. This might explain the confusion.
I suspect the bigger cause is just people constantly being told straight-up lies founded on misunderstandings of how tax brackets work from a young age. I got my work permit to be able to get part time jobs when I was 14, and even when I was legally barred from working anywhere close to 40 hours a week, my father was already warning me “be careful if you take extra work, because if you do too much overtime, you could wind up in a different tax bracket and have to pay so much in taxes, you wind up with less money than if you kept working.” Which, now that I think about it, in light of you bringing up corporate taxes and how they work, I believe could just be clever propaganda from business owners misapplied by workers. During that time period, it was a perfectly valid tax strategy for companies to take extra profits and chuck them into capital improvements and similar projects to raise their costs. If they had just kept it as profits, they would have paid substantially more taxes on profits past a certain threshold, and they would make more money in the long term by avoiding those taxes than they would have if they just “made too much in profit” in the one year, to begin with. So, there would be a grain of truth to it in that specific instance, but it’s wholly inapplicable to a worker who believes their check will be smaller after working 50 hours a week than if they had just worked 40.
Yeah, companies still do that regardless of the rate.
As for understanding progressive taxation, I think the easiest way to explain it is simply to ask how much money you’d have after taxes. It always pays off to make more money. Perhaps show a XY diagram with income and income after taxes. There’s no magic bracket where the graph goes downwards.
They still do it, but in different ways now. The government has removed the incentive to reinvest in capital projects and wages to reduce your tax liability, and now companies game it in different ways that tend to just juice the compensation of the executives. Your CEO in 1955 had minimal incentive to boost their own pay above $200,000 because they could only keep 9% of what they earned past that point. It made more sense for them to just reinvest in their companies because they could ensure long-term stability and profitability, or spend money in the short term that ultimately reduced the amount of work they had to do in the future to complete all the tasks they were hired to manage for their $200,000/year salary. Nowadays, companies can just get tax exemptions up front for “creating jobs” before they even break ground on a new plant, put off maintenance and investments into the company and just chuck all that money they saved into stock options for their executives that will be taxed at a rate comparable or lower than what their lowest paid workers will have to pay on their salaries.
There was little point in burning the candle at both ends as a CEO in 1951 to get a $50,000 quarterly bonus for hitting targets if you only got to keep $4,500 of it. Why go nuts trying to juice your income by a measly 2.25% a year when you’re already at the very peak of US incomes? In contrast, a CEO today can go full MBA corporate raider mode, run a company into the ground so it’s shuttering its doors within 5 years, and then screw off to wreck another business after collecting a few quarters’ worth of multi-million dollar stock option bonuses that they’ll only have to pay some modest capital gains tax on. The incentives for good corporate leadership have been completely dismantled and replaced with an entirely perverse set of incentives that are now causing everything to be run into the ground.
https://www.irs.gov/pub/irs-prior/i1040--1955.pdf
1955 top income tax bracket is 91% for single income over $200k ($2.5M today). IDK what’s fake about that, except if you don’t understand the concept of bracketing taxes.
The problem is that no one actually paid that, during that same time period tax avoidance was stupidly easy. The average tax rate for the highest earners (over 200k) rarely paid over 45%. Still higher than the average of today, but nowhere near what most people claim about the time.
Plus, before 1986 a lot of the really rich people who could afford to lobby politicians used to be able to create “riffle-shot provisions” basically highly personalized tax carve outs created for them by individual politicians.
This sounds to me like people misunderstanding of the concept of tax brackets, not a deliberate deception. Yes, most people making over $200k in 1955 paid less than 91% of their income in taxes, because of course they did. In fact, they all did. It’s mathematically impossible for them to be required to pay 91% of their income as taxes because the income below $200k (again, $2.5M equivalent today) is taxed at a lower rate, and with a smaller wealth divide, fewer people were making vast sums above that amount.
Sure, there may be a handful of stable geniuses out there, the types of people who would turn down a raise because it would put them in a higher tax bracket, who could misinterpret “the marginal tax rate was 91%” as “91% of their total income was taxed”, but we dont need to cater every statistic to those people.
Yes, there is a difference between an effective tax rate and marginalized tax rate. However, my point was that no one ever paid the marginalized income tax rate of 91% for income over 200k. In fact the 1% of their day had an average effective income tax rate that was lower than the lowest marginalized bracket available which was 17.4%
There were just a lot more loopholes back in the day that catered to the super wealthy. They still had things like capital gains, but they also had the oil depletion allowance, accelerated real estate depreciation allowance, collapsible corporations, and the ability to daisy chain their reported income across a number of years. The ultra wealthy who could afford to lobby members of Congress also had the ability to pay politicians to create specified tax carve outs personalized to their specific needs.