Tax the rich

The IRS has a data section, much with EXCEL formats here.  Using that data, it’s an interesting excercise to “tax the rich” and assess how it affects the revenue, and therefore the deficit.

Here’s a simple google spreadsheet using 2008 as the baseline, and raising the rates on everyone earning over $200,000.  The rate I’ve chosen is to sock it to those rich bastards by taxing them at an effective 50%-every dollar they earn, take 50%.

Then, you have to take into account drop in earnings caused by the rate increase. Frankly, I think it would be high as 2nd income spouses stop work because their services at home exceed the value of the paycheck, workers opt for more vacation, so forth.  But in the spreadsheet, I assumed only a 10% drop in taxable earnings.

Interesting that i) with a Draconian and political nonstarter increase of approx 25 percent points to 50% and  ii) assuming that revenue will only suffer 10%, the exercise raises $200 Billion-less than 20% of this year’s deficit.

P.S.  Anyone know how to protect a Range (as opposed to an entire sheet) in Google spreadsheets?

About gary

  • demolisher

    and let them have at it with their 90% top-tax-rate fantasy

  • I prepared tax returns for a living for over 25 years. Sold the business three years ago. The notion that “rich” people don’t pay their fair share of taxes is absolute nonsense. Their deductions are phased out, they lose exemptions due to their level of income, and they pay tax at a higher rate.

    Without “rich” people we cease to exist economically.  

  • MerrimackMan

    Its a nice idea and everything, you know if the rich pay for the poor. But we already tried it. Thanks!

  • The “Rich” are always a convenient populist punching bag. When people think of “Rich,” they think of Bill Gates, Steve Jobs, Warren Buffet, etc. However, our tax code treats as rich the plumber down the street, the restaurant owner, and other small businessman who employ a significant amount of the US workforce. Someone like Steve Jobs who gets paid $1 per year while being one of the wealthiest men in America, is obviously a savvy money manager who has the resources to avoid paying all that much in taxes relative to the small business owner who needs to pay himself a salary from his business to survive.

    Most importantly, the regressive income tax hurts economic growth and punishes individuals for working harder, earning more or taking that risk to go for your piece of the American Dream. For this reason, I think more consideration should be given to the FairTax. There are obviously valid concerns with the FairTax related to black markets, the effect on the poor, and the unknown of just which rate to set to generate an appropriate amount of revenue. However, I believe the benefits of such a tax system outweigh its potential negatives.

    With a FairTax, someone like Steve Jobs, any of the Trust Fund set, tax evaders or the super-duper rich would no longer be able to pay a lower tax rate than a much poorer worker. As Gary noted, even raising the tax rate on the rich to an amount that only Bernie Sanders would advocate for would not generate that much more revenue compared to what we are spending.

  • Welcome to the future.

    I’m not responsible for the content!

  • Vote3rdpartynow

    people who drive cars too fast or too slow?  Basically, the joke is that everyone that is driving on my tail is an assh*le, and everyone whose tail I drive on is a slowpoke.  

    The liberals have a similar philospohy about wealth:  Everyone that earns one penny more than me is a rich, elitist bastard and should be taxed at a much higher rate than me, and everyone one penny poorer than that bastard should be on subsidized progams or welfare.  Its either/or.