

Top Income Tax Rate: How's 83% Sound? - AndrewDucker
http://www.businessweek.com/finance/occupy-wall-street/archives/2011/12/top_income_tax_rate_hows_80_sound.html

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gopi
Actually when the top income tax rate was in the 60's in US the capital gain
tax was around 25%, so the effective tax rate for the super rich was only 30%.

If this authors suggest the capital gain tax should be raised to 83% for the
rich then it will simply result in zero tax revenue from the rich. If my
capital gain tax rate is 83% i will simply pledge my stocks to the bank and
get a loan on it and spend it instead of selling the stocks and pay the tax!

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wtvanhest
I have read a number of papers and heard various opinions on this. The way I
think about this is as follows:

A person with $300mm in the bank gets only a small gain in utility for every
additional dollar they get to possess. (This is also the assumption the paper
must make.

Assuming that is true (I don't know if it is for sure) 1) the wealthy
individual will continue with ambitious persuit of more wealth without any
concern for utility. 2) the tax rate wont matter until they feel like the
government is spitting them.

Assuming those 2 things are true also (again I don't know for sure) the answer
that needs to be answered is:

Who is more efficient at allocating capital for the good of all society?

My opinion: some individuals will be terrible at this, but on average they
will be better than elected officials who's skill set is having maximum
influence rather than maximum ability to allocate capital.

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Craiggybear
Well, during WWII in the UK it was 99%.

