In an article entitled The Golden Age of Hollywood Tax Avoidance
gives away only the first and most obvious layer of the con they're playing in the subtitle "Do you really think Bing Crosby and Bob Hope paid 90 percent of their income to the taxman?"
Uh, no, because (for the zillionth time, and as very ably pointed out by AOC), a marginal tax rate
is not an overall tax rate
For those who actually go on to read the article, it does go on to correctly calculate that the tax on $1 million of taxable income would have been over $800k, or >80% overall (it's actually $858k, or 85.8% overall).
| $ bracket || % rate || amount taxed || bracket tax amount || total tax amount |
| $200k+ || 91% || $800k || $728k || $728k |
| $150k - $200k || 90% || $50k || $45k || $773k |
| $100k - $150k || 89% || $50k || $44.5k || $817.5k |
| $90k - $100k || 87% || $10k || $8.7k || $826.2k |
| $80k - $90k || 84% || $10k || $8.4k || $834.6k |
| $70k - $80k || 81% || $10k || $8.1k || $842.7k |
| $60k - $70k || 78% || $10k || $7.8k || $850.5k |
| $50k - $60k || 75% || $10k || $7.5k || $858k |
It then goes on to present a series of other bad arguments against raising the marginal rate... but let me summarize:
- 1. "Do you really think Bing Crosby and Bob Hope paid 90 percent of their income to the taxman?
- The implied claim, that nobody was actually paying 90% tax on their income, is irrelevant. (Nobody who was informed actually thought this; it's not new information.)
- 2. "Myself, I had a hard time believing that wealthy people in the 1950s had a different attitude toward the taxman than wealthy people do today. And guess what? I was right. <..> the top 0.01 percent in the 1950s paid <...only> 45 percent of their income in taxes"
- This is another straw-man, corollary of the first; nobody is arguing that the rich will ever pay their full tax rate. They certainly don't now; the top marginal tax rate for 2013 is 39.6% -- lower than the effective tax rate at which the article scoffed.
- 3. "When Bing Crosby won’t give a concert, it’s safe to say that the marginal tax rate is too high."
- ...no it isn't? He was still giving concerts, but for free, and was still making more money than most of us will ever see (he had "to live on a mere <..> half a million in today’s money"). What's ironic is that this directly contradicts half of claim #1, the implication that Bing Crosby wasn't actually paying that much in taxes.
The bulk of the article lists a number of tax loopholes performers have used -- some reasonable, most less so; if anything, the article is a reasonable argument in favor of eliminating tax loopholes, but it is not an argument against raising the marginal tax rate.
Sadly, many people will no doubt be left with the impression that it is.Footnotes
1. ...but which won't let Hubzilla fetch a preview because it might be a bot
2. ...assuming they've got the various margins and rates correct