Regarding Obama’s rumored plan to raise some cash off the banks who acted like smug pricks after we saved their ass and ours, I recommend Matt Yglesias’s take. The ‘revenge’ angle come up a lot, but that strikes me as the least productive way to discuss a policy (or worse, formulate one). Ideas like torture gain traction when you focus on revenge. This morning NPR addressed the moral hazard question, at least rationalizing a policy (e.g., a bonus tax linked with wedgies) that otherwise might look like revenge. Yglesias makes the ancillary point that a tax will get passed on to consumers no matter how you levy it, but given flexible demand consumers usually pass the cost right back to the company by buying less of their product.
It strikes me as odd that nobody has mentioned much that taxes not only raise revenue and punish (rectify moral hazard, if you will), they also modify behavior. Faced with two otherwise equally appealing options, more people will choose A if the government levies a tax on B. That way if B has some hidden cost not immediately obvious to the consumer (e.g., pollution) the government can package the hidden cost into consumer decisions. From that perspective I think that the choice between taxing bonuses and taxing transactions is not between similarly appealing options but between a good, even necessary idea and one that is neutral trending to counterproductive. What happens if we tax bonuses? Unless banksters suffer a conscience epidemic, which seems unlikely, my magic eight ball that only predicts obvious things says that most firms will give themselves larger bonuses. Goldman and friends will have no incentive to stop high-volume trading and incomprehensibly packaged “constructs” with negative net value (e.g., mortgage-backed securities) custom-made to inflate the next bubble.
High-volume trading, on the other hand, seems like the perfect chance to rectify moral hazard, pay down that TARP bailout and incentivize healthy behavior. Given the current rate of super-speed “micro” transactions, any tax that doesn’t raise multiple trillions of dollars will necessarily impose a nearly invisible fee on any given transaction. Any single consumer therefore will most likely only hear about the tax from Bill O’Reilly yelling about it. They key is that the margins on high-speed transactions are already tiny. That’s why firms execute them in such high volume. Shave even a tiny fraction off that margin and the most dangerous behavior will most likely disappear overnight.
If I’m right, banks that shared needles with hookers went hog wild on risky trades will have less bonus money to pass on to their smug asshole executives, and everyone wins.
***Update***
Someone at FDIC has been reading my posts – before I write them!
***Update 2***
Strunk and White can roll over in their graves a bit less.
valdivia
Couldn’t agree more. Ezra Klein had a great post on this yesterday as well.
robertdsc
If Obama & Reid decide to go the tax route, I do hope they learned their lesson with HCR and skip the regular order bullshit. Lieberman and the other conservative fuckups don’t deserve a chance to shut this down, so gather the relevant 50, go through reconciliation and drop the goddamned hammer down.
r€nato
If this tax is implemented, banks might raise fees on consumers to pay for it?
Well, we certainly wouldn’t want to have banks gouging us for the occasional NSF, would we?
Napoleon
Great post Tim and yes that is exactly the reason this tax should be passed.
arguingwithsignposts
The cynic in me says that the bankers are the only ones who ever win these days. But, yeah, I agree that a transaction tax would be the way to go.
Tim F.
@robertdsc: No – push it through both Houses. Do it three times if we have to. Republicans will hate that vote easily as much as they agonized over the Franken rape amendment.
MR Bill
The Brits and much of the rest of the civilized world have a transactions tax, as a way of keeping the bubbles down and the churning of paper at a minimum. This is the way to go, as it will raise (I think I just heard Dean Baker of TAP say on NPR) something like $100 Billion a year. Yes we can pay for Health care and take care of the deficit.
Revenge? We can work on that, But remember, as Gerald Murphy said “Living well is the best revenge.”
arguingwithsignposts
BTW, not to be the grammar nazi here, but this:
has an unclear antecedent. Did we act like smug assholes about it? More like angered mugging victims.
Ty Lookwell
… speaking of NPR this morning, Dean Baker was completely awesome in countering the deficit scare-mongering. I love that guy.
PeakVT
It strikes me as odd that nobody has mentioned much that taxes …… modify behavior.
Well, to be fair, wingnuts talk about the effects of taxes all the time. They just do it dishonestly.
Lisa
@Ty Lookwell:
Me too. And he was fucking awesome.
Breezeblock
I heard Dean Baker this morning too, and I screamed YES! when he mentioned reducing military spending. And I was doing my situps at the time!
WyldPiratd
consumers pay the taxes of businesses in capitalist systems. the banks will simply gouge the consumer of the services for the difference.
the transaction tax might help mitigate bubbles, but trust Congress to put in enough loopholes to minimize any pain for the banksters as they already avoid much of their tax obligation. hell, i think i read that goldman sachs paid ~1% effective tax rate.
it’s wishful thinking hoping for meaningful reform from our government. they are owned by banksters and special interests. nothing short of complete economic collapse or blood-in-the-streets revolution will derail the greedheads.
r€nato
@WyldPiratd:
Well we wouldn’t want THAT to happen, now would we? For instance, charging $39 for going over limit on your credit card or for an NSF.
daryljfontaine
@r€nato: They really can’t squeeze any more blood from the credit card fee turnip. Oh no, perhaps they will have to levy some sort of increased fees on the investor class directly, such as for managing
Ponzi schemeshedge funds or non-high volume transactions! Such a thing has never been done!D
colby
Why is this an either-or proposition? Couldn’t we do both the transaction tax and the bonus tax? In the America I love, we’re capable of both sound public policy AND cold-blooded vengence.
pantertree
We had a transaction tax during the 1929 crash. If it didn’t help then, why would it now?
If you want to get modify behavior and get rid of speculators, I think a better way is to go after the leverage/margins traders are able to get.
Plus we all know what will happen at the end anyway. Wall Street will pass this tax down to the average guy anyway. I would expect our 401k and mutual fund fees to go up as a result.
liberal
Yglesias makes the ancillary point that a tax will get passed on to consumers no matter how you levy it…
That’s just false, as a generality. It depends on the elasticity of supply and demand.
For example, you can tax land values as much as you want, and the tax cannot be passed on to the tenant.
Zifnab
@Breezeblock: Ditto that. And I like how he harped on medical expenses. Good to see someone tackling this head on.
liberal
@WyldPiratd:
Nope. Depends on the elasticity of supply and demand. In some cases, those might be such that the business can pass on the entire tax. In others, they can’t pass on any. Probably it’s usually somewhere in-between.
Alien-Radio
Lots of that volume on the exchanges is extracting rent from those traders who don’t have access to high speed exectuion, and it’s mostly for a very limited number of stocks. the transaction tax would effectively kill that. It’s basically free money for the traders who were engaging in it so they’ll fight like hell to prevent a transaction tax. there are systemic bonuses for reducing the liquidity of markets a little more viscosity prevents shocks from propagating as quickly.
tootiredoftheright
Of course as the repealling the gas tax argument shows there is nothing to stop the gas stations from pocketing the money instead of not passing the cost onto the consumer.
Numerous fees and taxes were lifted from banks and the banks still raised fees on consumers with the result being the gov’t revenue got screwed and the consumers wound up being screwed twice over by the banks.
liberal
From that perspective I think that the choice between taxing bonuses and taxing transactions …
Not that you’re necessarily saying otherwise, but that’s a false choice.
While I think taxing transactions is a great idea and should be implemented, overall the right thing to do in terms of public policy, plus one that would be awfully satisfying, would be to emasculate the entire financial sector.
A couple months ago JC posted the fact that the financial sector sucks much, much more out of the economy than it did pre-Reagan, with no obvious benefit (esp given that the Great Moderation turned out to be BS).
Thus, if we regulate the mother f*cking shit out the sector, reducing much of the essential services to highly regulated utilities, there won’t be nearly as much “profit” (*), so their won’t be these absurd bonuses. In that case, no need for a bonus tax.
—-
(*) Scare quotes because most of the current “profit” is ultimately parasitic rent collection anyway.
liberal
@tootiredoftheright:
But see, that really illustrates that the problem is complicated.
First, gas stations themselves make very little money; they’re squeezed by the oil companies.
Second, while in the short run consumer demand for gasoline is extremely inelastic, and hence consumers really get screwed in the short run, the longer run behavior isn’t nearly so elastic. (People buy higher MPG vehicles, start carpooling, stop buying homes so far from city cores.) That changes things.
Really, if people want to opine on this topic, they should familiarize themselves with the concept of elasticities of supply and demand, and how that affects tax burdens.
Napoleon
@liberal:
Plus think about it. To the extent that you buy and sell securities for your IRA or personal investments sure, it may get passed on to you, and for purposes of discussion lets assume worse case senerio and that it is 100%. But how often does 99.9% of the population trade? So the tax will amount to very little on that portion of the population.
But for hedge funds for the super rich and Goldman Sachs trading for their own account, which my understanding represent the vast majority of trades, there is no ordinary end consumer to pass the tax on to like, say, an import tax on steel may end up reflected in your car or washing machine.
The whole “pass on to the consumer” line is a red herring. Nearly 100% of the tax is going to come right out of the richest .1%.
danimal
@pantertree:
I’m in favor of a transactions tax, but you’re right, fees probably will go up. That’s kind of the point, all the trading and speculating will have more of a cost and that cost will slow things down a bit. IOW, a feature, not a bug.
Napoleon
@liberal:
This point can not be repeated enough. Certain companies and jobs create wealth, like farmers, autoworkers, etc. Others shuffle around the wealth, and although the shuffling may result in more effective allocation, and I certainly think the economy would be worse off if we had no bankers or attorneys (of which I am one) the fact is all those others are parasites on the system (including me).
geg6
@colby:
LOL! That’s pretty much how I feel about it.
More seriously, though, I’ve thought a transaction tax was the way to go from the start. Everything I’ve read about it (and, heaven knows, I’m no expert) hits my “this is the right way to do it” instinct.
DZ
We need a lot more banking expertise here and a lot less hyperbole. If you think that Goldman Sachs is the same kind of bank as Chase or Wells Fargo or BofA, you clearly know nothing about banks. Goldman is an investment bank that makes all of its revenue from trading and investing. The other 3 have investment banking arms which should be heavily regulated like Goldman should. BUT, the other 3 have branches, millions of individual customers, they offer checking and savings accounts, write moprtgages, car loans, etc. Plus, they do commercial and corporate banking. Goldman does none of those things. Also, not one of that group of 3 wrote subprime mortgages.
So, if you tax bonuses, you don’t harm the millionaire traders at Goldman but you do harm the 28K per year call center employee at, say, Chase by taxing his $1000 bonus. Screw the people you claim you to want to help? Amazing
Mr Furious
@pantertree:
I’m just guessing here, but I assume the sheer volume of transactions that occur on a per-second basis with computers and specialized software now is orders of magnitude larger than the amount of transactions possible with tickers and actually having to run across the exchange floor with paper shares.
DZ
@colby:
I’m with you on taxing transactions with one caveat – no tax on 401K transactions. Again, harming the wrong people.
Tom Levenson
@arguingwithsignposts: This is why this comment community is so delightful.
And boy, did Tim jump to your tune.
Napoleon
@Mr Furious:
From Wiki:
geg6
@DZ:
First and foremost, it really is irrelevant whether or not if they wrote subprime mortgages. Did they do the same kind of gambling on them that GS did through their investment bank arms? I believe they did. Second of all, the three banks you mention are lenders with whom I am extremely familiar due to their credit card and student lending practices. They have done almost as much damage to people through their gouging in those areas as any subprime mortgage lenders. And, from what I understand (and perhaps I’m wrong), the bonuses to be taxed will be those that are determined to be beyond reality. I very much doubt there will much of a penalty for a teller who gets a $1000 bonus.
The Republic of Stupidity
Is there even such a thing as a TELLLER who gets a $1K bonus?
tootiredoftheright
@liberal:
“. (People buy higher MPG vehicles, start carpooling, stop buying homes so far from city cores.) ”
Yeah when the price of gas jumps so much that the average person who has to drive five hours each day to get to work winds up spending several hundred dollars in gas.
Thing is that repealing the gas tax in no way helps consumers lower the price of gas or helps them buy more gas. It’s a penny a gallon that goes to fund road repairs that hire several hundred thousand people a year so repealing the tax winds up hurting consumers more.
It’s why taxes shouldn’t be repealed just because they are a tax you have to carefully consider the consequences of not having that revenue come in as well as what effect it would have on the consumer for example there is no guarntee what so ever that the business would use that money to pass the savings onto the consumer or invest it in growing the business.
The Republic of Stupidity
Let me try and understand this.
These guys are trading strictly on mathematical patterns they use computers to sift out of data… in effect… the computer picks up an emerging ‘trend’, so to speak, and then they jump on board and try to make money off of it instantly?
Is my basic assumption correct?
If so, it’s almost like they’re creating their own weather front… the simple fact they’re buying so quickly, based on the equally simple fact there’s a possibility the stock is starting to raise, in fact, assures that stock WILL INDEED rise at that moment.
Help me here… is this not betting on their own bets? I’m betting this stock will go up, because the fact that I just bought it… has made the price go up.
Is this not a computerized form of Pump & Dump?
gypsy howell
For example, you can tax land values as much as you want, and the tax cannot be passed on to the tenant.
Huh? It’s called “rent.”
bago
@pantertree: The whole “Getting rid of speculators” thing is antithetical to the entire concept of a market. You’re buying stock speculating about the future of the company that you’re buying stock in.
That being said, a transaction tax would force you to think about a trade for more than 500 nanoseconds.
Nutella
@The Republic of Stupidity:
Yes. And it would be interesting to see someone knowledgeable analyze how much of the boom in the finance sector was due to that.
Napoleon
@The Republic of Stupidity:
It actually may be even worse then that since there has been some evidence that they are in effect front running, but regardless the effect of what they are doing is transferring profits from ordinary investors to entities like Goldman Sachs. The tax will recover some of it for the public coffers and hopefully also lower the number of those trades which will leave more money in the pot for ordinary investors.
There is no reason not to have this tax in a world where a lot of the day to day static in trading is being created by supercomputers owned by the super wealthy.
Tim F.
@Tom Levenson: I couldn’t bloody well ignore it, not unless I first covered up my desk copy of Elements of Style in shame.
Randy P
@The Republic of Stupidity:
I’m not a teller, nor do I work in a bank. Some years I’ve gotten a shirt with the company logo on it. It’s a nice shirt. Would probably cost me $20 or more to get the equivalent at K-mart.
I’ll bet tellers get swell swag like that. Ballpoint pens, pocket calendars, sky’s the limit.
Seriously, I’ve never worked anywhere that had this concept of “bonuses”. Nor, so far as I know, does anyone I know get “bonuses”. It is an entirely fictional concept as far as I can tell. A world I’ve never had any contact with.
Alex S.
Couldn’t agree more.
High-speed trading is like building a house of cards on record speed. Stocks can only climb as much as the companies and the economy behind them. Today’s technical possibilities, computer-trading and such, make you able to gamble for minimal changes in stock prices. If enough people do that. You automatically raise stocks beyond their “healthy” level. And once someone else believes in these prices you have created a bubble. I know that basically everything on Wall Street is a bubble (you always place bets on your expectations that still have to become reality), but human greed and technical flexibility will almost literally turn Wall Street into a poker table.
A transaction tax, maybe a flat tax, would avoid that. It will make people want to go for higher revenues and longer terms of thinking.
I also like your point about taxes on bonusses. You’re right, a low tax will only hurt the companies, not the executives (in the short term, which, sadly, is almost everything that matters today). IF you want to go for such a tax, make it really high.
Alex S.
Hehe, previous post in moderation, I wonder why (I used the word p.oker t.able and g.amble)
danimal
Now that we’re all agreed that a transactions tax is the way to go, let’s watch as Washington imposes a symbolic tax on bonuses that hurts no one in the real world and raises virtually no money. I’ll get out my rusty pitchfork on this one. Anyone with me?
The Republic of Stupidity
@Randy P:
And don’t you know the ruthless SOBs are out selling that hot merch at flea markets all over the country as quickly as they can…
Seriously… anybody remember BoA’s ill-fated ‘Adopt an ATM’ campaign for their employees, from about 8 -10 years ago?
(This was real…)
The bank announced a bold new employee initiatve, wherein the worker bees were expected to ‘adopt an ATM’, then go out on weekends, clean the area around it, do a little gardening, talk to the f-in’ machine, ask how it was doing…
Okay… mebbe not that last part… but the first – adopt, clean, and garden? Totally real… and on their own time…
Went over reeeeeeeeeeal well, huh?
That’s why it became the model for similar programs, w/ other banks, all over the country.
Brian J
Here’s the thing: since it’s extremely hard to raise revenue, the revenge angle must just be what we need to get over that hump. Since nobody who isn’t averse to all taxes seems to question the worthiness of this tax, so the question isn’t whether we need to implement it, but instead how to do so.
I think we can use the idea of revenge but tone down the way in which we pitch it. Imagine if Obama and whomever else was speaking for his administration simply said, “We helped Wall Street out. Now they can repay the favor.” There’s a lot of space between something like that and having someone screaming at the top of his lungs, “Let’s get the motherfuckers!”
The Republic of Stupidity
@Nutella:
@Napoleon:
And whatever you do, PLEASE don’t tell me those f-in’ crooks collect a commish on every stinkin’ trade, in addition to the money they make buying lower and selling higher, or vice-versa…
I TOLD you… don’t tell me that…
This appears to be nothing less than computerized, INSTITUTIONALIZED market manipulation… the wee folk, like you or I, go to prison for trying this sh*t…
inkadu
@The Republic of Stupidity: Adopt-an-ATM sounds like a Geiger-inspired corporate comedy.
Did a search on it, and can’t find anything after 1999, when the California board of labor called bullshit.
JGabriel
Tim F.:
I suspect they already give themselves the largest bonuses they think they can get away with. Also, it should be remembered that the bonus system on Wall St. is frequently not a reward for success, but largely salary-disguised-as-a-reward for corporate tax dodging purposes.
.
Cat
@The Republic of Stupidity:
Because they then sell it to the guy whose computers respond 100ms slower then theirs and pocket their $25 profit.
It was this guys intent to buy say 50k shares in 1k blocks to keep the price from going up to much that triggered the computers algorithm to buy shares or the stock to begin with.
Cat
@The Republic of Stupidity:
I dont remember if it was discussed here and I’ve not followed the case that much, but a programmer who worked on the HFT software left for another company and there was some evidence he took some code with him. It was never said what code he took, he could have easily taken code that wasn’t GS code.
Anyways, he was arrested and charged in like 3 days after they noticed it. One of the arguments made by the DOJ to keep him in prison rather then out on bail is that they HFT software he allegedly stole could be used to manipulate markets.
Read that as you will. I’m just repeating the DOJ’s argument.
The Republic of Stupidity
@inkadu:
Huh… so gov’t ACTUALLY disagreed w/ Big Business?
Well… zoot alors… but… BoA had the F-in’ gall to try it, huh?
The Republic of Stupidity
@Cat:
There were a few words missing from your statement.
I hope you mind if I finished the thought.
I t’ink dis is one we put away in the ‘Pay No Attention To That Man Behind The Curtain’ file.
Joe Buck
If banks react to a tax on bonuses by giving themselves larger bonuses, the federal deficit will be significantly reduced. The NPR story today gave a $120 billion figure for the money that would be raised, but if bonuses go up substantially that money would be higher.
The Broderites are screaming about the deficit. One way to address it is to tax harmful behavior. If you tax something you get less of it.
And if banks respond to the tax by increasing fees to consumers, consumers will be able to move their money to local banks and credit unions that don’t provide those massive payouts and therefore have lower costs.
Tsulagi
Given institutional market manipulation crap like this, yeah, a transaction fee would be a sensible way to go forward. Wouldn’t stop that type of trading, but at least possibly keep it from growing if not slowing it down.
However, wouldn’t hurt to also tap those executive bonuses of companies that took TARP money. Doesn’t have to be either/or. A sensible dispassionate long-term plan, plus a little short-term revenge. Win/win.
Great Britain went a similar route bailing out their financial sector, and the behavior of players in that industry who helped create the mess was also similar to ours. GB tagged the bailoutees with a one-time, 50% windfall tax on bonus amounts over $40k. Makes sense to me. Government money directly made those bonuses possible so give them an opportunity to share and show their appreciation to fellow taxpayers.
Next Monday, Goldman Sachs is expected to announce their bonus payout amount for 2009…
Why deny them the joy of showing their love like their British peers? 50% sounds good.
The Republic of Stupidity
Golden showers indeed…
So much for ‘trickle-down economics’…
inthewoods
I prefer to separate the tax and the issue of HFT – HFT should be illegal, as I see it, because they are able to use flash orders and basically see into the order book ahead of normal retail customers. The exchanges allow this under the guise of providing liquidity, but it’s a sham – Goldman made money on these HFT something like 80% of the time. Any trader that is making money 80% of the time has an unfair advantage – it is clear.
Taxing the transactions is a secondary conversation.
Phoebe
me likey
Nutella
@Tsulagi:
The Thatcher government reduced taxes preferentially in order to attract foreign financiers so the 50% bonus tax is some small compensation for years of almost-free rides. I was trying to find a link to document the preference and ran across this article on the proposed change from 40 to 50% for the maximum rate. The letters are fun.
The Populist
You know what’s funny about all this? If Obama and his team make so much profit from the people they bailed out that we pay down the deficit. That would be classic…
Morbo
Yet another piece of evidence that it’s the right way to go is the fact that Megan McArdle thinks it’s a bad idea. Make it so.
Bruce Webb
Just shoot me now:
“Yglesias makes the ancillary point that a tax will get passed on to consumers no matter how you levy it, ”
That this bogus glibertarian talking point has been internalized by younger self-styled progressives disgusts me. This has been used to block pretty much every progressive proposal out there, except for the ones where it doesn’t work in which case it is ignored.
In the glibertarian model prices are totally elastic when it comes to taxes, they simply get passed through to customers.
In that same glibertarian model prices are totally inelastic when it comes to wages, minimum wage simply results in job loss.
And all of this in the face of a larger economic model that suggests that price is automatically set according to supply and demand.
What the glibs never openly admit is that their sole concern is profits. Given a classic demand/price relation an increase in cost to the supplier is going to crimp profits or cause the supplier to cut costs. The implicit argument that cost cutting particularly when it comes to labor is just a consequence of the cost increase, whether that be a new tax or whatever, and not of some free choice by the employer to value profit over employee welfare is just special pleading.
Of course it is a truism that the price paid by the customer is going to have to cover the cost of a new tax, that doesn’t mean the price itself is totally elastic.
That BTW is one reason why I finally deleted MY from my bookmarks, the guy enables Reaganomics/Rubinomics every day seemingly without understanding that their shared principles did not come down from Mt Ararat on stone tablets.
inkadu
@The Republic of Stupidity: I wouldn’t call the California Labor Board actual “government.” I’m sure Arnold has eliminated the position in this latest budget anyway.
Darryl
It’s not true that any increased cost a business faces can be automatically passed to consumers. When you go to fill up your car, and gas costs 10 cents more a gallon, that doesn’t mean when you get to work they have to pay you more money beginning immediately. When my grandmother ran a trailer park and charged $250 per month per lot, and her property taxes went up by $25, she didn’t change the rent to $250.34. Those are examples of how some things are sticky.
Darryl
Another example, that junk you see at $9.95 on late night commercials at 3 a.m., is not going to change to costing $10.45 if business taxes go up 5%.
Sly
From Ezra’s piece, this:
would probably be better than a transaction tax on limiting high risk behavior. Not that I’m poo-pooing a transaction tax, but without precisely nailing the proper amount, and implementing it the right way, a lot of liquidity could dry up. With a transaction tax, you’re trying to target specific groups in the financial sector and, if the tax isn’t implemented well (which I think is likely if the intent is to punish), it could hit a lot of other people. A transaction tax against the NYSE has been put forward many times as a means of funding the NYC’s public schools (and holy shit would it ever), but it fails more often in the crafting of a tax than by political pressure from Wall Street against it.
But putting pressure on all companies to use deferred stock as compensation would do much more to limit all high-risk behavior than a transaction tax. If a manger is forced to take a stake in a company that he or she can’t cash in on for decades, like CEOs can do now with options, then you’ll see a lot more pro-investment managers. The only thing that’s preventing them from outright defrauding their shareholders and employees, which they have every financial incentive to do if they’re paid in options or cash bonuses, is that they don’t want to share a prison cell with Jeff Skilling and Andrew Fastow.
DZ
Are there tllers who get $1000 bonuses? Yes, thousands of them. This goes back to my original point which is that people know absolutely nothing about banks.
@geg6: I don’t disagree even though I work for one of those banks. Although not writing subprime mortgages is important compared to Citi and Wachovia and Washington Mutual who did write them.
I have problems with my employer – no question – but real, retail banks are not Goldman which was my original point. Apples and oranges is the usual approach but doesn’t seem to be in play here.
mclaren
Why don’t we go back to one of those wild crazy futuristic avant garde economic ideas from, you know, 1956? Let’s reinstate the Eisenhower administration’s maximum tax rates.
You make a million dollars a year? Great, 95% tax bracket. You make 100 million a year? No problemo, 99% tax bracket. You make a billion dollars a year? Wunderbar, 99.9999999999% tax bracket.
We’l have the usual yahoos screaming that this will destroy capitalism. My response? Great. Sounds like a plan. Capitalism is too toxic to live. Obliteration seems just.
To the fools who whimper that this doesn’t apply to capital gains — make it apply to capital gains. Eliminate the distinction. Hell, tax capital gains at a higher rate than salaries. Also, while we’re at it, how about a 99% VAT tax on purchases over a million bucks?