No universal "should"—it depends on trade-offs between incentives, revenue, fairness conceptions, growth, and evidence on elasticities. Higher statutory rates on the wealthy are already common; the real questions are effective rates, base breadth, avoidance, and whether the goal is more revenue, less inequality, or something else.
Current Reality, Not Slogans
In the US (the usual reference), the federal individual income tax is already progressive: top statutory marginal rate 37% + state taxes + NIIT, with the top 1% paying roughly 40% of federal income taxes and the top 10% paying the large majority, while the bottom half pay little to none net of credits (IRS/SOI data). Effective rates are lower than statutory for high earners because of capital gains/dividends preferences (often justified by prior corporate tax or deferral), deductions, charitable giving, and municipal bonds. Wealth is not the same as taxable income; much wealth is unrealized appreciation, closely held businesses, or retirement accounts. Corporate taxes, payroll taxes, and estate taxes also hit capital and high earners. Many European countries have higher top rates/VAT but also different bases, enforcement, and spending mixes; mobility and growth differences matter.
"Pay a higher tax rate than they currently do" can mean raising top marginal rates, taxing unrealized gains, wealth taxes, closing preferences, or surtaxes. Each has different incidence, avoidance channels, and deadweight loss.
Arguments for Higher Rates on the Wealthy
•Ability to pay and marginal utility: Extra dollars matter less to someone with $10M than to someone with $50k. Progressive taxation finances public goods, insurance, and redistribution with less utility loss. Diminishing marginal utility is standard in public finance.
•Revenue and fiscal arithmetic: High earners have money. In high-inequality environments, the top tail is where the taxable capacity sits. Some optimal-tax models (Saez et al.) estimate revenue-maximizing top rates in the 50-70%+ range once you include externalities of inequality or assume low labor supply elasticities, especially if you can limit avoidance.
•Inequality and social effects: High and rising wealth/income concentration (Piketty-Saez-Zucman top shares, though measurement debates exist around unrealized gains, consumption, and transfers) can affect political influence, status competition, and mobility perceptions. Post-WWII decades had much higher top statutory rates alongside strong middle-class growth (though causation is muddy—reconstruction, demographics, technology, unions, and lower globalization mattered).
•Market imperfections: Economic rents (monopoly, network effects, bailouts, land), inherited advantage, and luck justify clawbacks more than pure marginal product. If government already subsidizes or protects certain wealth accumulation, higher taxation is a corrective.
Arguments Against, or for Caution
•Incentives and growth: Taxes on high incomes/capital reduce returns to work, saving, investment, entrepreneurship, and risk-taking—the activities that expand the pie. Labor supply, taxable income, and capital elasticities are positive (especially long-run and for top earners via effort, form of compensation, and location). The Laffer curve is real: beyond some point, static scoring overstates revenue and dynamic effects (avoidance, delayed realization, emigration, less innovation) shrink the base. Historical US revenue as % of GDP did not collapse when top rates fell from 70%+ to ~28-40%; the share paid by the top often rose. Cross-country and state evidence shows capital and talent mobility.
•Effective vs. statutory, and incidence: High statutory rates with loopholes create complexity, lobbying, and unfairness between the "connected" wealthy and everyone else. Much of the corporate tax and capital tax burden falls on workers via lower wages/capital intensity (standard public-finance result). Wealth taxes have repeatedly underperformed or been repealed in Europe due to valuation fights, capital flight, and low yield (France, Sweden, Germany experiences). Unrealized capital gains taxes raise liquidity, lock-in, and admin nightmares.
•Fairness and desert: If income arises from voluntary exchange and value creation, the case for confiscatory rates weakens relative to ability-to-pay. "The rich" are not a static class; there is churn. Confiscation of returns can be seen as punishing success. Government spending has its own waste, capture, and low marginal value—more revenue does not automatically mean better outcomes.
•Empirical patterns: Extreme mid-century US rates coexisted with narrower bases, different avoidance tech, and a less globalized economy; growth was good but not uniquely because of 90% brackets. Nordic success combines high taxes with broad bases, cultural compliance, work incentives via design, and historically more homogeneous/high-trust societies plus resource/ oil factors—not just "tax the rich." Poverty reduction over decades has come far more from growth and absolute income rises than from redistribution alone. Inequality metrics that ignore consumption, transfers, household composition, and immigration can overstate problems.
Trade-offs and Better Framing
Optimal top rates in Mirrlees/Saez-style models depend heavily on the elasticity of taxable income, the shape of the income distribution, and social welfare weights. Estimates vary widely; small elasticity differences flip the answer. Broadening the base (fewer deductions, preferential rates) + moderate rates often beats narrow-base high rates for revenue and efficiency—this is the bipartisan tax-reform consensus when people are serious. Consumption/VAT-style taxes, land value taxes, or carbon taxes can be more efficient than piling onto capital income. Enforcement, international coordination (or lack thereof), and whether revenue funds high-return public investment vs. transfers/consumption matter enormously.
If the goal is maximizing long-run broad-based prosperity, evidence leans against very high marginal rates that trigger large behavioral responses. If the goal is compressing incomes/wealth for its own sake or funding a much larger state, higher rates on high earners follow—subject to the constraint that you cannot ignore exit, avoidance, and growth effects forever. "The wealthy" is also heterogeneous: founders/innovators vs. heirs vs. rent-seekers vs. high-skill professionals respond differently.
For data, see IRS Statistics of Income, CBO distribution tables, OECD revenue stats, and public-finance reviews on taxable income elasticities (Saez, Gruber, Goolsbee, etc.). Both "tax the rich more" absolutism and "any progressivity is theft" absolutism ignore the actual elasticities and institutions.