As you’ve said: the wealth/income gap was much smaller then than it is now.
Want to “broaden the tax base” and “make more people pay”? Then reduce the income/wealth inequality and bring back the jobs that paid a living wage and provided benefits for the workers. That way, more people will be pushed up into the higher tax brackets. This isn’t rocket science, folks.[/quote]
So let’s see how the income gap has been going. The IRS data makes this really simple. So in 1986 total income was about 2.5 trillion and the top 1% made 285 billion of that. About 12.5% of total income. In 2008 total income was 8.4 trillion and the rich made 1.6 trillion of that so about 19% of total income now. If you straight line the average increase in wages (I didn’t adjust for population) it’s about 5% per year for everybody and 9.25% for the top 1%. If you assume the rich grew at the same rate as everybody else (i.e. take the 5% growth rate) you end up with a number that is about half of the current number I.e. 800 or so vs 1.6 trillion. Presume this gets distributed to the middle class and it’s about a 10% increase in wages.
Even you assumed that you currently don’t tax this money at all because the rich hide it from the irs and giving it to the middle class means you could tax it at 25% only gets you $200 billion in revenue. Of course these are wildly incorrect assumptions. The difference in tax rate for the rich vs the middle class might be more like 10% so you might get $80 billion more in revenue by putting this money into the middle class and broadening the base.[/quote]
Not only would you have more tax revenue, “the 99%” is more inclined to spend a greater share of their income rather than “invest” or speculate with it, or keep it in tax havens overseas. The income of the less-rich is also more likely to be spent in this country, so we could provide even more domestic jobs and grow our own economy vs. having the rich use that money to set up shop in China or speculate on asset prices which can push up prices for end consumers.
Each domestic transaction would be taxed, too, so the government would get revenues from corporate taxes and sales taxes, as well as income taxes.
The goal is to keep money in circulation without any debt offset. That can only be done if money is pushed down to those who are most likely to spend it or invest it in productive ways (not asset price speculation). The 1% have already proven that lower tax rates for the wealthiest Americans will NOT lead to more jobs or a stronger economy for the majority of Americans. Time to go to “Plan B.”
