How could raising taxes on the top 1 to 2% of income earners be good for an economy?

the current top rate is 35% .....so assuming that top rate went gradually as high as 50 or 55% ...like 55% for any portion of anyone's income that is in excess of $7 million dollars a year. What positive impact would these hikes on the top earning individuals have on USA's economy and how could it help restore a healthy economy??

Update:

lol but how did the country survive for example in 1955 when the rich paid super high taxes or in 1947 or in 1965?

Update 2:

A review of our income tax history shows that since 1913 most of those years have had tax rates higher than 60% for the wealthies americans? how could this be?? how could our country have gotten so successful and wealthy and have balanced budget etc and send missions to the moon etc....with such high tax rates?

LMAO ........ROFL

11 Answers

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  • 1 decade ago
    Favorite Answer

    People who make those kind of high salaries (that is the people who actually work for it) are the people running their companies. If you raise their taxes, they will have to increase their own pay to compensate for the lost take home. To do that they will either reduce employees or increase product costs. This is paid in the lost middle class job (usually middle management) or higher prices for products. Should the owner accept a lower take home salary, then they would buy fewer things, usually the bigger things like jets and yachts. Those yachts and jets are made by skilled workers and will loose their jobs if demand drops. History has shown that when these top end taxes are lowered economic activity increases, and thus revenue to the treasury increases. There is a point of diminishing return for the government, but that was why the previous Administration called the top line at 1/3 of income. More important is the shift in the burden of governance. When more than 50% of the people receive more benefit than taxes paid, then sound spending practices get thrown out the window. The $750 Billion bailout was supposed to be a one time thing with payback potential. Now we are told it will be $1 Trillion deficits "as far as the eye can see". The best economic stimulus that could be done would be to cut all tax rates, corporate, personal, and capital gains to 5%. The boom would shatter eardrums! then once recovered we could move to a system such as Neal Bortz' Fair Tax Plan. God Bless these United States and Good Luck!

    Listen to JFK on the issue - Sounds like a great Republican to me!

    http://www.youtube.com/watch?v=aEdXrfIMdiU

    Youtube thumbnail

    We paid for the Moon shots by CUTTING TAXES!

  • 4 years ago

    Cute, but false analogy. First of all, the group hasn't had enough money to pay the bill since Bill Clinton was President. There was NO $20 reduction in the bill. In fact, the cost went up. Yet Bush, Inc decided that one guy really needed to have his share cut. Now the 5th, 6th, 7th, 8th and 9th guy also got small reductions in their share. The group then had to borrow money from their descendants to make up the difference. We "evil" liberals would simply like the 10th guy to pay the exact same amount he paid under Bill Clinton so the group doesn't have to borrow as much. Oh, and that 10th guy. The one who paid $59 for his share of the meal? He actually about made $67 of all the income earned by the group during the years 2002 thru 2007. Odd that he's only paying 59% of the bill, eh?

  • justa
    Lv 7
    1 decade ago

    At this point you won't be seeing positive impact, just a lessening of the problems we have and are going to have.

    By the way the top income earners used to pay much more.

    And once you make over $112,000, you no longer pay FICA, that's Social Security. If we want to ensure that SS is around for years to come all we have to do is raise the income level to $250.000, and we are golden. By the way, those upper income people also collect SS when they are old enough.

    There is a vast sea of people between uppermost income level and welfare. Its not taking from the rich to give to the people who don't work, its more like evening the playing field so a secretary doens't pay a rate of 33% while her boss pays a rate of 18%.

  • teagan
    Lv 6
    1 decade ago

    I've tried to explain this but the poor and un-educated still believe the government is like Robin Hood taking from the rich and giving to the poor. The truth (for anyone who will read it) is this. The rich in America ARE THE EMPLOYERS!!!! If you tax them, the poor and middle class WILL be laid off to compensate. Taxation should be simplified to the point of the 1040 being a 1/2 page form with 6 lines.

    1.How much did you earn? $50,000

    2.Multiply that figure by 15% * .15

    3.Enter that total here. $7500

    4.How much did you pay in taxes? - $6500

    5.Subtract line 4 from line 3 and enter the total here. $1000

    6 if your total is negative we owe you, if it's positive, you owe us.

    Sign here

    Source(s): Common sense
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  • Anonymous
    1 decade ago

    It's good PR, but won't bring in much money. Most people don't understand basic economics. If they did, many of them wouldn't be so poor. In Business, you make more money selling something cheap to the poor, then you would selling something very expensive to the rich. The same goes with taxes. THere are so few rich that it wouldn't increase or revenue that much.

  • Anonymous
    1 decade ago

    First of all they do not even pay their taxes...they know how to move money well....in fact the upper class overall pay a average of 23% of heir taxes. In a ratio a CEO pays less in taxes then his secretary.

    Second trickle down economics was first purposed by Ultra conservative Alexander Hamilton the financial wizard who was the evil beginnings of the federalist/Early modern day republicans who absolutely hated blacks, commoners and immigrants. How do you funnel money to the rich...while still get the masses voted and controlling them...tell them OH check is in the mail...it will come to you. What happens when it does not.....who cares you already got in office they bought your lie.

  • 1 decade ago

    it would have a negative effect on the economy. The economy requires the upper echelon individuals to spend more money to restore a more vibrant economy. by taking money form the rich ( and the people that buy stuff) and give money to away ( welfare) you are actually hurting the economy.

  • 1 decade ago

    It allows the government to gain revenue from those who do not need it as much as other allowing the government to slash rates for the middle and lower classes.

  • Anonymous
    1 decade ago

    This isn't going to happen.

    Speaking as someone who has been at the top bracket, people at that level can stand a couple percentage points more.

    You've been duped by the trickle-down theorists, who have been thoroughly discredited.

    Mink coats don't trickle down, they just shed.

  • Anonymous
    1 decade ago

    by stealing from the rich and giving it to the poor. it is good to rob money from someone successful and give it to someone that does nothing with their life. all praise be to obama

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