If lawmakers double those rates for millionaires, we'll be able to take their deficit rhetoric seriously.
Does that sound radical? It wasn't too radical for Dick Nixon. During Nixon's Presidency the capital gains tax increased every year, rising from 27.5 percent to 36.5 percent. The highest tax rate for other forms of "unearned income" under Nixon was 70 percent, while the top marginal tax wage was 50 percent.
And We Like Ike: The top tax rate for everything but capital gains was 91 percent under Dwight D. Eisenhower. (The capital gains tax was a relatively modest 25 percent.)
Magical Thinking
Tax-cut advocates say we can't raise taxes on billionaires because they'll stop investing or hiring. Wait, let me get this straight: If an investor writes a check today and makes a billion dollars, he or she keepa 850 million dollars after taxes.
But by this wacky Randian logic, that investor won't think it's worth it to write the same check next year. They'll be too demoralized and discouraged. Only $700 million in return for my signature? Ohh, no. I've lost my motivation. I'm collapsing into a black hole of despair and ennui. I surrender! I refuse!
I don't think so.
The extremist of the right and the angry billionaires tell us that they'll emulate an Ayn Rand fictional character by "going Galt," refusing to make money the way they increasingly do -- by not working for it. (Will rich kids refuse to collect their inheritances, too?)
Nobody "went Galt" in Ike's day. Maybe we just had a better breed of millionaire back then: Tougher. More patriotic. Made of sterner stuff.
Colonel Tom Parker, Elvis Presley's manager, said he considered it "his patriotic duty to get Elvis up into the 90 percent tax bracket." Now that's the kind of fiscal patriotism I believe. In fact, I'd give it a score of 91 on the "American Tax Bandstand": It's good for the economy, and it's got a beat you can dance to.
Higher billionaire tax rates built America. They worked for FDR. They worked for Truman. They worked for Eisenhower. They worked for Nixon. But somehow they're not going to work now, because billionaire investors won't "work" at watching their money grow?
I don't think so.
They Don't Make Republicans Like They Used To
Romney would cut the millionaires' and billionaires' historically low tax rates even more, from 35 percent to 28 percent, would eliminate estate taxes (because nothing says 'fairness' and 'opportunity' like billionaire kids who don't pay taxes) and keep the capital gains rate at its current low rate.
Romney's tax plans aren't just fun and games, though: He'll really bring the hammer down on charities. While certain forms of charitable deduction need reforming, Romney's approach is a strange way to go at it -- unless you think our economic problems were caused by food banks, not Wall Street banks.
Romney's proposals would slash revenue overall, but he says he'll make up the difference by closing loopholes. That's not a gag line; it's his stated policy. No wonder Bill Clinton made so much fun of it in his speech at the Democratic Convention. He got big laughs, too.
Good one, Bill! Who in their right mind believes that you can give away more billions in breaks to billionaires, and that lawmakers will more than make up the difference by suddently getting tough on loopholes -- the ones they created themselves?
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