Wednesday, October 22, 2014

Can We Really Undo the Damage Done by Reagan?

Kinderman and Krueger have a working paper out at the National Bureau of Economic Research proposing a return to the Eisenhower era's top marginal tax rate of around 90% as one step toward increasing federal revenue while at the same time reducing the alarming inequality we are witnessing here in the US.

Diamon and Saez have also suggested a much higher top marginal rate, settling on an optimum figure of 73%.  About 70% seems about right to me. In my post of Feb 2013 I proposed these tax rates:
Suggested marginal rates for married filing jointly - halve the income ranges for singles. The top marginal rate (constant dollars) is the same as it was in 1965-66.
10%            $0 - 25,000
15%            $25,000 - 75,000
25%            $75,000 - 150,000
35%            $150,000 - 325,000
50%            $325,000 - 650,000
60%            $650,000 - 1,500,000
70%            Over $1,500,000

Let's hope that the Kinderman Krueger paper will move the range of discussion acceptable to the Village in a rational direction.

No comments:

Post a Comment