Brought up WWII as you referenced it in your earlier comment justifying the 70%+ tax rate. Didn't bring up WWI because I couldn't find a handy reference to the % of GDP the government was spending. It is relevant because as a temorary measure, if the government is consuming 40%+ of the economy to fight a war, then justifying a high tax rate is reasonable. You aren't talking about a stable situation, but a temporary 'do or die' situation.

Ugh,

You are still left with the facts that the tax rate went down, but the revenue received is greater than the economy grew. The simplified liberal model that tax rate changes are only tied to the tax rate and the economy growth just don't hold water.

And this circles us back to the point of the text. I can guarantee you that what Rangel is proposing is a repeat of the luxury tax. It won't raise the revenue expected and the people who will feel the real crunch are not those in the top 5%.

The header is making fun of years of liberal/Democratic rhetoric regarding the Bush tax cuts.

That said, the Bush tax cuts cannot be defended in the face of the enormous spending increases. For the young, we aren't getting tax cuts, we are getting tax deferrals -- the bill will eventually come due after it is too late to collect from the baby boomers (aka lazy boomers), a bitter irony since it is their Medicare that will probably be what finally forces us to face reality. So as for crediting the 2001 tax "cuts" with stimulating economic growth, I am reminded of Lloyd Bentsen's second most famous line in his debate with Dan Quayle: "You know, if you let me write $200 billion worth of hot checks every year, I could give you an illusion of prosperity too." Plus, it appears that the recent growth (which while positive hasn't been that great in any case) may also have been fueled as much or more by people living above their means using home equity loans funded by the bubble in their housing value. Not exactly the bedrock of a sound economy that we spend more than we make in both the public and private sectors. But until Americans really demand a responsible government (I agree with Bloomberg, you can't just blame the politicians because the reality is we get the pols we ask for), and get a bit more responsible themselves (or perhaps forced to be through tax policies that encourage savings) we are never going to balance the budget, stave off a Medicare meltdown and save the dollar (also known as our national wealth, for those of you lulled by exporters into thinking the falling dollar is a good thing) before it is too late.

article on job losses caused by the tax

7,600 jobs in the yacht industry were lost thanks to the luxury tax.

Look, if you find yourself in the fortunate circumstance of being able to purchase say, a yacht during a time of luxury tax.

Whatever you do, when the IRS comes to discuss your tax burden, don't scream "But I bought it from a shipyard in Rotterdam!"

Trust me, they won't be as amused as I was.

It's not an insult, its an aid to the reader in understanding the Wall Street Journal editorial page when one doesn't have time to marshal arguments, do research, and make a presentation - you'll be right more often than you'd be wrong if you just assume opposite of what the WSJ editorial page says is true.

But anyways, "Tax rate reductions increase revenues." Followed by a bunch of post hoc ergo propter hoc reasoning. With the same reasoning I can prove the opposite "Tax rate increases increase revenues" by pointing to the Clinton tax increases in 1993 and the subsequent increase in federal tax revenues.

Then there's the "largest four year revenue increase in U.S. history." Well, is that inflation adjusted? Is it largest as a percentage of the budget? Or is it just the largest in nominal terms, which really tell us nothing useful (my money is on this one)?

Then there is the WSJ's favorite trick of (misleadingly) pointing out "look how much the top 1% of earners are paying in taxes these days!" Well, if they're earning a much greater percentage of income in 2003 than in 1980 - which they are - then of course they're going to pay a much greater percentage of total taxes. Also note that in this paragraph is their second favorite trick of excluding payroll taxes when doing this calculation (and also note that in the previous paragraph they use "federal tax receipts" and now they're using "income taxes" - not the same thing).

Finally, it's also not an insult because the Wall Street Journal editorial page exists for one reason and one reason only: to deliver as much of this country's income and wealth into the hands of the top 1% as possible. They don't mind a bit of (baldfaced, in some cases) lying and misdirection in pursuit of this goal.

The rich just bought their toys outside of the US. The US yacht building business started laying off Joe and James because their business went in the toilet.

Let's see if anyone points out the idiocy of this comment. I haven't bothered to read all the subsequent comments because this one was just so freaking hilarious!

In WWII the US government was 40 to 45% of GDP, most of that going to the war effort. Today, the US government is ~20% (+/- a couple points) and about 6% is going towards defense. So trying to justify a high tax rate based on the war is a non-starter.

I like the way you think here. If the problem being solved is that the AMT has gone beyond its initial scope, lets go back to the original income tax rates.

The presidential election of 1912 was contested between three advocates of an income tax. The winner, Woodrow Wilson, after the ratification of the Sixteenth Amendment, called a special session of Congress in April 1913, which proceeded to pass an income tax of 1% on incomes above $3,000 and applied surcharges between 2% and 7% on income from $20,000 to $500,000. A few years later the Supreme Court kissed and blessed progressivity.

While it's not a flat tax, I think a maximum of 7% is conducive to a growing economy.

ugh,

So you hurl insults but don't bother dealing with the facts presented.

"In the context of the Rangel proposal are you suggesting that the government has an obligation to maintain people at a middle class standard of living in New York or San Francisco?" - DS

Not at all. I was commenting on SV's use of the relative term "rich" as a pejorative when applied to the Rangel proposal.

What I'm trying to ferret out is what's the argument for government action in this instance? - DS

If you are referring to the Rangel proposal itself, I'd suggest that it is an attempt to undo the damage from a particularly onerous and badly implemented bit of past government action. Specifically the AMT, which (in concert with inflation) continues to drive more and more of the American middle class into carrying a higher tax burden than was intended by the initial AMT legislation.

As I implied, my preference would be for a flat a tax as possible with as few exceptions as possible. That does not seem to be in the cards. The Rangel proposal is incrementally better than what we have now.