Reply #114: Ultimately, that's a question that's open to interpretation.

[Selatius]

If we're talking about social programs, this program I suggest to organize workers, the war in Iraq/Afghanistan, the national debt, etc., naturally we're all going to come to a different idea of what is sufficient in terms of a progressive payroll income tax, capital gains tax structure, etc. to sustain these programs, the war, and pay down the debt at the same time.

"I don't think the practical tax rate should be higher than X percentage points." The Laffer Curve, at least in this context, suggests the answer is not 0 percent or 100 percent, but it doesn't suggest what the answer in the middle should be. Some people think 90 percent is the answer for X. Others may think 60 percent is the answer for X, and still more may think 50 percent is the answer, since it is equidistant from 0 and 100. I'm speaking, of course, of the highest tax bracket. We're not talking about taxing the working poor at 60 or 90 percent of their payroll income. If we assumed capital gains is taxed the same as payroll, then naturally the percentage point there would be the same as X, but I doubt the business world would willingly want to pay 50, 60, etc. percentage points out of the income they derive from trading shares on the stock market to the income tax.

As it stands, the current maximal payroll tax bracket is set at 35% for the people at the top and a maximum of 15% for capital gains. I guess the question here is whether you believe a working class person making 35,000/year should qualify for the 25% tax bracket, while somebody in the top 1 percent who derives most of his money from capital gains has his capital gains taxed at 15%. (As far as I can tell, nearly everybody in the top 1 percent derives the bulk of his income through capital gains)