[quote=SK in CV]
How far can you go taxing the rich? That’s a good question. Certainly much farther than we’ve gone so far. We’ve done it in the past during boom times and they didn’t stop working, they didn’t get poorer as a whole. The rich have had extraordinarily low taxes over the last 10 years, when compared to prior decades.
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There’s a theoretical Laffer curve which says there’s some optimal tax rate in which the most tax dollars are collected. There’s probably also a curve for the most optimal tax rate for economic growth. History says the best economic time have been associated with an effective tax rate of around 18-20%. I could see revenue increases to 2.8, maybe a little higher but you still have a ton to cut. Of course with medicare and social security growing faster than GDP it just gets worse. In essence you need to slow the growth of SS and medicare to something less than GDP. Maybe the easiest solution is to just have people wanting to join those programs wait in a queue. You could arrange that queue based on need, but you stop the uncontrollable growth.
Based on the actions taken by many high wealth individuals towards the end of 2012 I’d be willing to bet right now that 2012 tax revenue is higher than 2013 tax revenue.
