Tags: Joe Scarborough | Steven Rattner | income taxes

Scarborough: Republicans Should Consider 'Minimum Tax' Rate

Tuesday, 22 Apr 2014 01:06 PM

By Wanda Carruthers

Republicans should consider the notion of a "minimum tax" rate, talk show host Joe Scarborough said.

What makes for a fair income tax rate was part of a debate as MSNBC's "Morning Joe" discussed the new book "Capital in the Twenty-First Century" by French economist Thomas Piketty. Scarborough discussed the inequality in a system that allowed the nation's highest earners to pay a lower percentage in taxes than middle-class workers.

"If you make a billion dollars, you shouldn't be able to say, 'Well, I made investments and then carried interest. And, I'm only going to pay 14 percent,'" Scarborough said on "Morning Joe" on Tuesday.

Story continues below video.

Piketty's book contains a review of the economies of the United States, the United Kingdom, and Europe over the last two centuries, with a focus on wealth distribution. It illustrates the shift in income inequality in the United States and United Kingdom.

Scarborough challenged Republicans who embraced a system that supported "any millionaire paying a 15 percent tax rate on millions and millions of dollars they make per year, when their secretaries are paying 28 percent." He suggested the GOP should support a "minimum tax" to prevent high-income earners from avoiding taxes.

"Should our party not support a minimum tax? We certainly support a maximum tax . . . Shouldn't we support, for all Americans, at least a minimum tax that's, say, about 25 percent?" he asked.

Piketty's book details how Britain led with a higher income divide until the Depression and the two world wars, when the United States shot higher. Financier Steve Rattner said income inequality was now higher in the United States when compared to all of Europe.

"Today the top 1 percent in the U.S. has 33.8 percent of all the wealth in this country. And in Europe the top 1 percent has 24.4 percent.

"Today the U.S. has gone from being a more democratic, less unequal society than Britain to being a more unequal, less democratic society," Rattner, a former counselor to the secretary of the treasury under President Barack Obama, told "Morning Joe."

Piketty suggests sharply raising the tax rate on income and capital. He recommends a rate of up to 80 percent of incomes over $500,000 or $1 million, and rates of up to 60 percent on incomes above $200,000.

Rattner explained the role of tax rates in income distribution that enabled wealthy Americans to hold onto a higher share of their earnings. He suggested the taxation system "helps the wealthy."

"The effective tax rate of the wealthiest Americans has come down and down and down until very recently it's ticked up a little bit, because we've cut the tax rate on capital gains. We've cut the tax rate on dividends. We've cut the tax rate on estate taxes," he said.

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