Ayn Randians love to ask this question concerning tax rates. They know that there can be no innately perfect answer, so they gleefully pose it in the hopes that the conundrum will show Liberals that taxation its self is illogical. But wait a second. I say the fair tax rate for any individual should be based on the idea of what is best for society as a whole. Not simply to redistribute wealth, but taking into account how much government revenue is necessary to keep law and order and help the nation thrive through investments in infrastructure and modernization. And we must consider who profits most from these investments and is in the best position to contribute. This answer will always be in flux and should be based on our analysis of history, what worked and what didn't.
Life is full of questions which don't have perfect answers, but which we must make our best effort to deal with for society is to function. What is a 'fair price' for anything? In our free market the answer is 'whatever the market will bear', but we all agree that price gouging during a natural disaster should be prohibited and no one would want that to be the guideline for our government in setting fees for licenses (driving or marriage, or business) or penalties for crimes committed. None of these questions have perfect answers, but we all know they must be answered.
During the Great Depression we raised the upper tax rates on the most prosperous citizens to double or triple what they are today. That led to the USA having 45 years of unprecedented growth and prosperity. I say that today we need to learn from that lesson. I am not in favor of taking the rates back up to those levels on the wealthy, but it seems very clear that the 'fair share' the wealthy should pay needs to be moved somewhat back in that direction. Taking the upper rate back to half of what it was during our hey days, 45%, would be a very wise and modest move in the right direction.
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