The IMF has released a report hailed to be the coffin nail for Reaganomics. Basically Reagan claimed that if you put more money in the hands of the rich they will spend that money and it will fall into the pockets of the middle class. The IMF has found that rich people tend to just put what excess money they have into their investments.
I can understand this. After a certain point you are spending all the money you can and you get no substantial return on your lifestyle by spending any more.
With that in mind I’d like to suggest that maybe up to a certain level of affluence you can improve the economy by easing up on the tax burden but above that level of affluence it no longer works.
Maybe we do need to look at personal wealth along with income to determine the upper end tax bracket. Maybe if a person has a net worth of under $10 million we use the current tax brackets for taxing income. If a person’s net worth is between $10 million and $20 million then any income over $400k is taxed at 45%. For those with a net worth of more than $20 million but less than a $1 billion then any income over $400k is taxed at 75%. For those worth $1 billion or more then any income over $400k is taxed at 95%.
Note that I am saying “any income” here. Why treat earned and unearned income any different for those who are worth more tha $10 million?