The 90% tax and our punitive nature

The Wedge's picture

Recently, anger over executive bonuses at American International Group, Inc (AIG) spilled into an unconstitutional "ex post facto" law that would tax these bonuses at a 90% level. It seemed to have a broad support, but constitutional scholars have weighed in and the measure appears to be dying. However the bill may be moot because the New York Attorney General appears to have leaned on these executives to give back the bonuses in order for their names to remain in obscurity. So, the outrage of contracted bonuses for TARP funded companies appears to have shaken money from these people-but let’s look at the cost of our anger.

A 90% tax is not new since the passing of the 16th Amendment that allowed for the levying of an income tax. The top rate was as high as 94% in 1944 and remained at 91% or higher all the way until 1964. This high of a tax rate is basic confiscation, dressed to avoid the dreaded 100% total confiscation that most normal people find abhorrent. If we deem a certain level of income to be “sufficient” and everything else above it to be worthy of confiscation, where do we want to draw the line?

There is a class envy and anger over executive pay. There is justifiable anger as public companies are to have a Board of Directors that monitors sound business practices and expenditures. These Boards have done a terrible job of policing themselves as they are executives in other companies normally and there is a kind of incestuous makeup of Leadership and Boards and cross-linking. Real work needs to be done here in the regulatory area. But still, where do we draw the line?

What is considered to be too much of an income? Is living in New Haven, Smokerise, Whitewater, or etc proof that they need a portion of their income confiscated? And why are we angry at executives that have worked to get to the tops of their companies, but give Oprah Winfrey a pass as the head of Harpo? She certainly makes a lot of dough per year. What about the sports figures? Should we place a cap on their salaries and confiscate the overage. Mad about Matt Ryan’s contract or the money that Michael Turner is making? Should be place a 90% tax on Oprah or Ryan’s salary on anything above $500,000 per year? How do we decide this?

Where are we going to go? As the President is speaking tonight, I wonder how much we are going to nationalize. Truman couldn’t nationalize the Steel industry during the Korean War. I believe that the president could get away with it today. Autos, healthcare, insurance. What percentage of the economy will become a Command economy? A 90% graduated tax rate is one way to help get to a Nationalized economy.

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Submitted by skyspy on Wed, 03/25/2009 - 8:07am.

Nationalize or socialize??

The important thing is we don't want to punish the welfare people or the illegals getting free health care. We have to make sure that life is a free pass for them.

It's the people who do work and pay taxes that need to learn a lesson and be punished for their behavior. Stop producing.

We are on the wrong track and have been ever since the inception of welfare programs. When you reward people for not working they have no incentive to work and pay taxes.

JAFO 72's picture
Submitted by JAFO 72 on Wed, 03/25/2009 - 11:41am.

Some people on this post may not understand sarcasm. You might actually generate a thread for the, how shall I say...naive.

“Ignorance can be fixed. Stupidity is forever”

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