Ezra Klein, WaPo: A rich guy’s case for (much) higher taxes

[highplainsdem]

http://www.washingtonpost.com/blogs/ezra-klein/post/a-rich-guys-case-for-much-higher-taxes/2012/04/17/gIQA384rNT_blog.html

“I was a kid in the 1950s,” says David Levine. “And the whole time, the top marginal tax rate was 87 percent. Not many people paid that much. Only three baseball players — Ted Williams, Joe DiMaggio and Willie Mays — got there. But it was 87 percent.”

Most people, of course, do not mark major life events by the top marginal tax bracket at the time. But David Levine isn’t most people. Levine is the former chief economist for the investment-management firm Sanford C. Bernstein. He is, as you might expect, a very rich man. But he’s one of those rich guys who, like Warren Buffett, is begging the government to raise his taxes.

Levine has been following federal tax policy for most of his adult life. “My main job was to forecast the economy,” he shrugs. “So taxes are tremendously important to that. And tax policy changes are tremendously important.” And, to him, those changes mostly went the same way: cutting taxes on people, like Levine and his friends, who didn’t need tax cuts, as the working class struggled.

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It would be one thing, Levine says, if the economy had performed so much better after taxes on the rich were cut. But it didn’t. Some of the fastest economic growth of the post-war period came in the 1950s, when the top tax rate was above 80 percent. The slowest growth came in the 2000s, when the top tax rate was 35 percent. So the fastest income growth for the top 1 percent has come under the low-tax regimes, while the fastest income growth for the median American came when taxes on the richest Americans rose.

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