Since there is so much talk about the need for a fairer system of taxation here in the US, I wanted to ask my blog’s readers: what percentage of their income do you think it would be fair to ask people who make over a million per year to pay in taxes?
From what I understand, they are now taxed at 30%. In my opinion, this is completely fair and asking such people to pay more makes no sense. What do you think?
Now, there is also the whole issue of hedge fund managers who, reportedly, pay the tax rate of about 15% on their investments. As far as I know, the entire number of hedge funds in this country is between 7,000 and 12,000. Most of them are “boutique” hedge funds that manage less than a dozen million of other folks’ money. This means that what the owners of these hedge funds get isn’t all that huge of a sum (in relative terms, of course). In any case, the idea that hedge fund managers routinely and massively make “billions of dollars”, which many people like to believe, is preposterous. So even if the hedge fund managers get taxed at 30 or even 60%, this will be an absolute drop in the bucket for the federal budget.
Of course, “let’s tax the rich to feed the poor” is a great populist slogan. What does it mean in practical terms, though? What kind of taxation system would make better sense than the one we have right now?