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This is a much higher tax rate for the upper middle class than in the 50's, I think.

Just to point out that François Hollande, when he said, "I hate the rich" during the presidential campaign, got burned for defining "rich" as someone who made more than 4000€ a month. I'd say even those making 8000€ a months are not perceived as obscenely rich in Europe.

What do we define as unhealthy inequality ? I fully agree with you that 200 k€ is already obscene, but that's not the public perception of it. Someone who did well on the property bubble, buying a 200 k€ house at the low point and selling it when prices have doubled, will be in that bracket ; and that's the case the opponents will put forward.

Even many parts of the upper middle class making that kind of money yearly are not perceived as "one of them" by most of the population. That's the arguments that have been used to push down the rates : it's normal people that are benefiting from lower taxes.

Unhealthy inequality is currently that of the upper percentile of the population, the kind of income that allows one to own large companies, etc. That's income above 500 k€, not 100 k€. It's possible to make those earning more than 500 k€ into them ; not as much for those earning more than 100 k€. And high marginal rates will be much more viable if they only hit the wealthiest ; as pointed by the Hollande polemic : if you aim too low incomes, the tax rates will quickly come back down.

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Sat May 31st, 2008 at 08:38:58 AM EST
[ Parent ]
Okay, so let's make things more progressive...

Assume
0% below 1x GDP
10% between 1x and 2x GDP
20% between 2x and 4x GDP
40% between 4x and 8x GDP
60% between 8x and 16x GDP
80% between 16x and 32x GDP
90% above 64x GDP
100% above 128x GDP

I.e., you shouldn't make more than 256k/mo...

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Sat May 31st, 2008 at 08:51:46 AM EST
[ Parent ]
My meaning exactly. Now we must also define a wealth tax.

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Sat May 31st, 2008 at 09:34:09 AM EST
[ Parent ]
Multiply the tax rates by 20% and the tax brackets by 20:

Assume
0% below 20x GDP wealth
2% between 20x and 40x GDP
4% between 40x and 80x GDP
8% between 80x and 160x GDP
12% between 160x and 320x GDP
16% between 320x and 640x GDP
18% between 1280x GDP and 2560x GDP
20% above 2560x GDP

Assuming GDP/head = 25k, we're talking no wealth tax below 500k, and 20% above 64M.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Sat May 31st, 2008 at 09:41:26 AM EST
[ Parent ]
For similar reasons, I'd cut the first bracket away : a 700k home happened upon much of the Parisian-and-suburbs middle class as a result of the housing bubble. The "standard family home" has been used as an excuse to cut the Estate tax ; let's not allow the same excuse for the wealth tax.

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Sat May 31st, 2008 at 09:51:29 AM EST
[ Parent ]
Okay, multiply the brackets by 30 (longer lifespans and lower long-term ROC rates). Also start with a 1% rate and round off the multipliers

Assume
0% below 30x GDP wealth
1% between 30x and 60x GDP
2% between 60x and 120x GDP
4% between 120x and 250x GDP
8% between 250x and 500x GDP
12% between 500x and 1000x GDP
16% between 2000x GDP and 4000x GDP
18% between 4000x GDP and 8000x GDP
19% between 8000x GDP and 16000x GDP
20% above 16000x GDP

The top bracket kicks in at 400M.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Sat May 31st, 2008 at 09:59:36 AM EST
[ Parent ]
Wealth... marked to market or marked to model?

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Sat May 31st, 2008 at 09:45:12 AM EST
[ Parent ]

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