Progressive Taxation Act (Failed)

[Ban my account ffs!]

Sponsor:  Senator Antonio V

Progressive Taxation Act

1. For income gained in 2011 and thereafter, an additional tax bracket shall be added to those defined by the Fiscal Responsibility Act.
2. The new tax bracket shall apply to :
    a) An income superior to $4,000,000 for single individuals.
    b) An income superior to $5,000,000 for civil partners filing jointly.
    c) An income superior to $2,500,000 for civil partners filing separately.
    d) An income superior to $4,000,000 for heads of households.
3. The marginal taxation rate for this bracket shall be 75%.

[Fmr. Pres. Duke]

75%???

[Sbane]

And I thought 60% was high.....

I hope the Senate rejects this. I doubt revenue will increase too much due to this, rather it will further encourage tax evasion.

[HappyWarrior]

75%???

Yea thats just insanely high and I am fairly progressive economically.  That isn't progressive, that is regressive.

[Antonio the Sixth]

Fellow Senators,

In the last years, the reduction of the public deficit has emerged one of the main priority of our economic policies. While already facing a recession, one we must fight agains, our government can't afford taking some action against our deficit : the more we wait, the harder it will be for us to repare the damages, the higher is the risk for us to suffer from the consequences of deficit. That's why we found ourselves in a double-bind situation. We must at the same time stimulate the economy and reduce our deficit.

How can we do ? Opinions differ in this regard. There is probably no miraculous solution that will solve all our problems, but there are several ways in which we could act. To put it simply : reducing a deficit requires either to cut spending or to raise taxes. Nowadays, the first solution seems the most trendy of the two. We are starting to see austerity plans everywhere in Europe, from Greece to Britain. Despite a tepid and uncertain recovery, governments massively cut their spending by reducing wages, limiting the number of civil servants, or abolishing mechanisms of social protections. That's what Atlasia could to either. But is it what we should do ?

I want to advocate for the second option. Sure I could sound "unusual", "heterodox" or even "crazy" if we base ourselves on the conventional wisdom. For about 30 years, economists and politicians have kept repeating that the only way to solve every problem was to limit government intervention. The economy is in bad shape ? Let's cut taxes ! We have a huge deficit ? Let's cut welfare programs ! "Down with government intervention" has become the economic creed of western countries. To the point that we are no convinced that "there is no alternative" to the reduction of spending/taxes. Well, it's time to stop blinding ourselves. There is an alternative, and this alternative needs to be discussed and debated. If my bill manages to at least cause a debate on this domain, I can consider it as a success.

I have the conviction that government is not the problem, but the solution to our economic problem. And this bill is a step forward this solution. So, why raising taxes instead of cutting spending ? First of all, because it's the less worst option for our economy. Atlasia still lacks a decent safety net to prevent extreme poverty, a major difference with European countries (my social security reform bill is aimed to correct that). If we cut the few welfare programs we have, the consequences for the population could be catastrophic. Poverty means losing buying power, thus consuming less, thus harming the economy. We know that very well since the Great Depression. Let's remind it each time some wise politician complains about "welfare queens". At the same time, what would be the consequences of adding a new tax bracket ? People who would be subject to the tax hike are those who are also the most likely to spare most of their income, and thus using it for unproductive activities. If we have to choose between penalizing savers or consumers, the first choice is undoubtedly the best one economically speaking.

Secondly, it is the best thing to do if we care about our citizens. If we have to take money away from someone, the best thing to do is taking it away from those who have a lot. As I've said, for milions of Atlasian, welfare aids are the difference between an acceptable poverty and total destitution. We must acknowledge this fact when we abstractly talk about "cutting spending". Compared to this solution, tax hikes have a far lesser impact. The tax bracket I wish to establish would only apply to an extremely reduced wealthy minority. First of all, the people who would be "hurt" (the word isn't really appropriate there, because I doubt anyone would actually suffer from that), are far less numerous than in the first case. And also, it is not the same for a wealthy person to become slightly less wealthy, than for a poor person to become slightly poorer. There is a lot of difference between gaining $500 or $1,000, but there is far less between gaining $10,500 and gaining $11,000. That simple fact should be taken in consideration.

The third argument is more personal, and anyone can disagree with me on that. It simply comes from the vision I have of the society. Inequalities are acceptable in a society, as long as they don't reach a certain level of decency. Since the 1980s, the economic inequalities have boomed in western countries, to the point that today someone can make in one month what another one would in one century. I, personally, can't find it legitimate. Even if anyone were rewarded proportionally to his merit (which is absolutely not the case), there must be some limits to richness. And who other than the government, could set that limit ? This bill won't suffice to make our society fair, but it's a clear improvement over the current situation. If you agree with me current inequalities are unacceptable and must be reduced, then you have one more reason to vote for this bill.

Once again, there are many valid concerns over this bill. I will be glad to hear them and adress them, so that we can finally have the debate I was waiting for. For example, I am fully aware that this bill could have negative consequences on investments, and I am therefore ready to consider ways to limitate this effect. For example, I think an effective counterpart could be to reduce corporate taxation, so that the government would still gain money, but at the same time partly compensating investors. I am ready to work closely with fellow Senators interested in building a compromise on this domain.

Hoping to stimulate your interest in a crucial policy issue, I'm now glad to start debating with my fellow Senators in order to do what is best for our economy, our constituents and our country.

[Franzl]

I voted for the 60% when I was in the Senate, something I'm not entirely comfortable with....but higher than that is completely absurd.

[President Mitt]

Jesus Mary Christ. I hope the Senate rejects this.

[Fmr. Pres. Duke]

I could read that whole post, but it's just a waste of time. It don't believe it's the government's job to limit richness, and they'll find a way to avoid this anyway. I probably would have a problem voting for any tax over 50% and this is just way too high. I hope my fellow senators join me in rejecting this bill. It'll do this country no good, and I doubt there will be any substantial revenue increase to offset the horrible PR this would bring.

[CatoMinor]

*Starts playing this from the visitors galley* 

http://www.youtube.com/watch?v=lWAl5V-SiKQ&feature=related

[Lief 🗽]

I would prefer a rate of 99% for this bracket, but 70% is fine as well. This bill has my support.

[Southern Senator North Carolina Yankee]

There is a certain point beyond which a tax rate is completely inneffective and innefficient. 75% is completely insane.

[Ban my account ffs!]

If we have a serious budget crisis, then I could see a bill specifically targeted to raise revenue through an income tax surcharge on high earners that includes an expiration date and a clause that requires a new bill to be completely rewritten should the desire come up to "extend" the tax.

If it is a structural deficit, then tax rates have to rise in a way that will provide the revenue needed.  I do not believe a 75% tax on the highest earners will garner the needed revenue.

[MASHED POTATOES. VOTE!]

I taxes.

[#CriminalizeSobriety]

In Atlasia, taxes pay you!

[Grumpier Than Thou]

Senators,

I speak on behalf of myself and the entire Jake Matthews for Assembly campaign when I say that the passage of this bill would be a disaster. Now, I will not preach my point of view on this issue, but I will say this: We can all agree that 75% is an outrageous taxation proposal. Whether you're an economic progressive or not, you can agree with me when I say that this bill ought to be either shot dead in it's tracks or amended. I urge you all to vote against this proposal for the sake of common sense.

Thank you for your time.

-Jake Matthews
Populares Party candidate for Northeast Assembly

[Lief 🗽]

Whether you're an economic progressive or not, you can agree with me when I say that this bill ought to be either shot dead in it's tracks or amended.

Not really, no.

-An economic progressive

[Fmr. Pres. Duke]

Who's Jake Matthews? And why is he posting in the Senate now?

[Grumpier Than Thou]

Who's Jake Matthews? And why is he posting in the Senate now?

I just thought I'd give my two cents on the bill, sorry if I am unwelcome.

[Fmr. Pres. Duke]

Who's Jake Matthews? And why is he posting in the Senate now?

I just thought I'd give my two cents on the bill, sorry if I am unwelcome.

No, you're welcome to, but well, I don't know.. You certainly are enthusiastic.

[Grumpier Than Thou]

Who's Jake Matthews? And why is he posting in the Senate now?

I just thought I'd give my two cents on the bill, sorry if I am unwelcome.

No, you're welcome to, but well, I don't know.. You certainly are enthusiastic.

I've actually heard that quite a bit.

[Antonio the Sixth]

Well, seems like my attempt to engage in a genuine debate on taxation, budget reduction, economic stimulus and social justice failed. I'd have apreciated critics other than "OMG that's insane !".

And I guess you guys know that some decades ago the maximum taxation rate was over 90%.

[Franzl]

And I guess you guys know that some decades ago the maximum taxation rate was over 90%.

Thank the Lord those days are over.

[Rowan]

Why should people even try to become wealthy if you're just going to take 75 cents of every dollar that they make?

[Franzl]

Why should people even try to become wealthy if you're just going to take 75 cents of every dollar that they make?

To be fair, that's not quite what this does.

[Rowan]

Why should people even try to become wealthy if you're just going to take 75 cents of every dollar that they make?

To be fair, that's not quite what this does.

Well yes, I understand what a marginal tax rate is. But we are still disincentivizing success.