How about a progressive consumption tax replacing the income tax to encourage savings? It might be impossible to implement... for now.
[edited to fixed a typo: "the" => "they"]
So, the super rich would indeed pay a smaller percentage of their income, only if they spend the same as an ordinary consumer, but they would pay much more tax (e.g. 60% after 1 million) if they spend everything they earn.
This would encourage them not to swap pieces of paper for real goods. It would make them have more money in the bank but less million dollar cars and yachts. The productivity saved from not producing those non-producing consumer goods can be used, e.g., on farming, so that food becomes cheaper for the general populace.
This plan would see the rich hording money, rather than spending it on luxuries. The kind of luxuries that are produced by western economies. When the rich spend their money on frivolous luxuries, it helps redistribute their wealth to the workers producing those luxuries.
To take an example to the extreme, it would be wasteful if Warren Buffet hired 10,000 painters to paint a portrait of himself everyday. The GDP would go up, but it wastes effort, effort that can be allocated more efficiently. (Using his own example here)
I've heard this argument before, and this is going to sound pedantic, so I apologize, but just exactly how rich can you be if you don't spend your money on things?
Or, put a different way, the rich only (bother us/owe more/are easy targets/need to pay up) because a) they don't have to work to live, and b) they buy and own cool stuff we want.
Obviously being able to live without working is a goal for everybody, so I'm tossing that out. What I'm left with is that we identify rich people by the stuff they buy or own. Without that, you wouldn't really have rich people -- or if you had them, as far as their participation in society they would be just the same as anybody else. They'd be invisible -- both in their appearance and in their stress on the social fabric.
So if you want to sack the rich, do it by taxing the things that we identify with being rich -- buying and owning stuff. That way -- poof! -- there are instantly less rich people in the world, and you've created a stable societal goal for people to strive for which kind of boils down to "make as much money as you need to not work" which is a laudable goal for every society, I would think. Right?
Not trying to argue, just thinking out loud. I've spent some time thinking about this, and I think a consumption tax could be supported by folks no matter what their political philosophy or party. The idea is inherently less political than an income tax. Of course, we'll all get hung up on whether it should be progressive or not, but hey -- baby steps.
As for why we want to soak the rich, it's clearly not (a) - most poor people work very little (by choice).
[1] Note: this is not my opinion on Android (I hate Steve Job's walled garden, and am very happy with my N1), but it is the opinion of several lower class people I know.
Keep in mind that rich people also have more of a vested interest in maintaining the system, so it's not entirely unfair to them, either.
Most government spending is simply taking money from some people and giving it to other people. This is explicitly not in the interests of the rich.
[1]Pareto-inspired made-up-statistic
This is categorically untrue. Social welfare and wealth redistribution, from the perspective of the rich, are a concession to the poorer classes in the interest of pacifying them and preventing a violent leftist uprising. Of course, this has to be done through the government rather than voluntarily because, for game-theoretic reasons, it can't be done voluntarily.
Of course, if the poor are truly as evil and dangerous as you say, wouldn't it be better just to wall them off from the rest of us? For the cost of welfare, we could triple the money we spend on the police.
You're right, and there other self-interested motivations for rich people to support social welfare, including hedging against future misfortune, support of friends and loved ones who may not be as well off and who would be more expensive to support on an individual basis, and the fact that end-of-life health care is often expensive enough to matter even to the significantly wealthy.
Of course, if the poor are truly as evil and dangerous as you say, wouldn't it be better just to wall them off from the rest of us?
Where did I say the poor are evil? I'm accounting for self-interest, not making a moral argument.
Oppressing the poor in order to keep them from rising up against the ruling class has never worked. Taking care of the poor in order to prevent them from even wanting to rise up against the ruling class consistently works.
This isn't even a new idea. I ripped it off from Bismarck, who, "working closely with big industry and aiming to head off the Socialists, implemented the world's first welfare state in the 1880s." http://en.wikipedia.org/wiki/Otto_von_Bismarck#Bismarck.27s_...
As notahacker points out, a lot of this stuff is also a side effect of having a democracy. Having a democracy is perhaps an even better hedge against violent uprisings.
If that were true, there would be no need for force. We could make SS/medicare an opt-in scheme.
Where did I say the poor are evil?
If the poor will use violence unless they receive tribute, they are evil.
Oppressing the poor in order to keep them from rising up against the ruling class has never worked.
I'm only advocating separation. If the poor truly are dangerously violent, lets wall them off from the rest of us. A fence is pretty easy to police.
Oppression is only necessary if you need the labor output of the poor, which we manage to survive just fine without (in the US, the vast majority of the poor don't work at all).
No, you couldn't. For game-theoretic reasons, it has to be mandatory to work.
If the poor will use violence unless they receive tribute, they are evil.
Again, I'm not making a moral argument at all. It's your own moral judgment to tar hungry people as "evil" for rising up against a wealthy ruling class--and expressing sentiments like that, quite frankly, reveals far more about you than about me.
If the poor truly are dangerously violent, lets wall them off from the rest of us. A fence is pretty easy to police. Oppression is only necessary if you need the labor output of the poor, which we manage to survive just fine without (in the US, the vast majority of the poor don't work at all).
The poor aren't "dangerously violent" unless they starve or otherwise slip into absolute destitution, at which point they will try and take what they can get from the rich. The entire history of violent revolution bears this out.
And I think you're misunderstanding this. I'm talking about the distinction between the richest 5% of society and the other 95%. Because that's roughly how the original problem--progressive taxation--is meant to break down anyway. And if you add up things like Medicare, Social Security benefits, and unemployment insurance--frankly, there's a lot of legitimate need for those things, even among working and middle class populations.