Short answer: It depends on your goals—but a well‑designed, modest increase in effective tax burdens on very high–income/wealth households can be justified and achieved with relatively low economic cost if you focus on base‑broadening and enforcement rather than big jumps in headline rates.
How to think about it
•Reasons to raise:
•Vertical equity and ability to pay; the utility cost of one extra dollar is lower at the top.
•Revenue for high‑return public investments and debt sustainability.
•Today’s code favors certain kinds of capital income and enables deferral/avoidance; tightening these can raise revenue with fewer distortions than raising middle‑class taxes.
•Much top‑end income is “rents” (from market power, location, or luck) rather than new production, so taxing it is less harmful to growth.
•Reasons to hesitate:
•Very high statutory rates can spur avoidance, income shifting, and relocation (especially in high‑tax states) with less revenue than expected.
•Some saving/entrepreneurship could fall if after‑tax returns drop sharply.
•Complexity and weak enforcement can make “rate hikes” symbolic but ineffective.
What tends to work best in practice (U.S. context)
•Raise effective rates at the very top mainly by tightening the base:
•Tax large unrealized gains at death (end step‑up in basis) or require carryover basis for heirs.
•Narrow preferential rates/deferral for very large capital gains and certain pass‑through income; limit shelters (e.g., stricter rules on carried interest, valuation discounts).
•Add a high‑income surtax or minimum tax that bites only above multi‑million‑dollar AGI, while keeping current brackets below that unchanged.
•Strengthen IRS high‑end enforcement and third‑party reporting; it raises revenue with minimal distortion.
•Preserve or better target incentives with strong social spillovers (charitable giving, genuine R&D), and index capital‑income taxation to inflation to avoid over‑taxing normal returns.
If you lean “no,” alternatives to raise fairness/revenue without higher top rates include: a broader consumption tax paired with rebates/credits to protect low‑ and middle‑income households; capping itemized deductions; or simplifying business/capital‑income rules to reduce gaming.
Bottom line
•If your priorities are revenue, fairness, and stability, then yes—the wealthy should pay somewhat higher effective rates—but achieved mostly through base‑broadening, closing avoidance channels, and targeted surtaxes on ultra‑high incomes and large estates rather than dramatic across‑the‑board hikes in top brackets.
If you want, I can sketch a concrete package with thresholds (e.g., above $1–5 million of income) and rough revenue ranges, or tailor it to state‑level interactions.