So small business can't take out loans unless they can realize and be taxed on the full valuation of their company immediately? As much as I can appreciate the goal, this is absurd.
Most small business owners probably can’t even do this, because banks won’t accept their shares as collateral. So in a sense you could say this would even the playing field between big and small business.
I don't think "slippery slope" is a reasonable defense here, especially with the situation you're using as an example. The top 40% of earners is a lot of people, and pretty close to the number of people that pay positive income taxes today (50% of earners pay 97% of taxes). The slope you're using as an example doesn't look very slippery, especially given that 100+ years of the US changing completely has happened in the meantime.
Judging by the timeline, it seemed like initial low rates had more to do with it being a new system, and less to do with some kind if "we will only do this to the rich" promise.
Also, they tried implementing income taxes previously, had it struck down by supreme court, then all the states got together to pass an amendment to allow income taxes. So, it was a pretty strongly supported change.
Honestly, I can get on board with "government tends to only grow in scope" point of view, I just don't think income taxes illustrate that point at all.
2) You're choosing 1917, pre changes, to paint an inaccurate picture. Top rate went from 15% to 67% that year, and 77% the year after. Almost double today's top rate.
What happened was, we introduced a revenue system, and have changed it over time, often dramatically, as the country's needs have changed, both raising and lowering rates. We haven't gone down some crazy spiral of ever increasing tax rates. If anything, the tax situation for the rich has gotten better over time, not worse.
I'm not sure what you're arguing - that it changed dramatically or that it has not changed dramatically. If you're arguing it has changed dramatically then I guess we are in agreement.
You should also note that 1917 was prior to the introduction of sales taxes (1921) and social security taxes (1937). Looking at only federal income tax paints an rather incomplete picture when looking at total tax burdens.
"A married couple with no kids will pay < 5% on 50k" I assume they're dual filing for the 50K so 25K on average? The lower %16 percent of the population. A weird number to pick.
Im arguing that the original comment, that income taxes weren't originally intended to be what they are today, or it was some kind of bate and switch, or slow bleeding, that led us to today. That was my read of thread parent anyway.
> You should also note that 1917 was prior to the introduction of sales taxes (1921) and social security taxes (1937). Looking at only federal income tax paints an rather incomplete picture when looking at total tax burdens.
We aren't arguing about total tax burden, we are arguing that a new kind of tax will/won't necessarily be abused and changed post introduction. Those three tax vectors prove that they won't be if anything, as they haven't changed much since introduction either.
>A married couple with no kids will pay < 5% on 50k" I assume they're dual filing for the 50K so 25K on average? The lower %16 percent of the population.
1) Most households were single income in 1917. 2) 50k was inflation adjusted equivalent to numbers that I was responding to. I didn't pick it at random, I chose it to show things hadn't changed much.
(That sounds unlikely to me, but I know little enough about the intricacies of business finance that it could be true...)
In response to "If one uses an asset as collateral for a loan" you wrote "So small business can't take out loans unless they can realize and be taxed on the full valuation of their company".
A company can also get asset-backed loans using as collateral something the company owns - or it can get a completely different kind of loan where there is no specific asset used as guarantee.