Short answer: It depends on what you want to optimize. If your top priorities are reducing inequality and raising revenue for public investment with limited growth trade‑offs, then yes—the wealthy should probably pay more, especially via better-designed taxes on high earners’ capital income and by tightening avoidance. If your priorities lean more toward minimizing distortions and preserving international competitiveness, you might keep headline rates roughly where they are but broaden the base and improve enforcement.
How economists think about it
•Equity: Because an extra dollar is worth less to a millionaire than to a middle‑class earner, progressive taxation can raise the same revenue with less overall “pain.” Rising top‑end wealth and income concentration strengthens this case.
•Efficiency: Very high top rates can push some high earners to defer, relabel, or shift income (and a small share to move); the key is how responsive they are. Well‑designed systems tax what’s hard to avoid and keep combined top rates below levels that trigger large behavioral changes.
•Administration: The biggest leakages come from preferential treatment of capital gains, unrealized appreciation stepped‑up at death, lightly taxed estates, pass‑through business income planning, and offshore/opaque structures. Closing these holes can raise substantial revenue without large headline rate hikes.
What “raising taxes on the wealthy” can mean (from easier to harder)
•Base‑broadening and enforcement
•Restore and protect IRS enforcement capacity and third‑party reporting.
•Limit high‑income deductions and shelters; cap or phase out certain tax expenditures at very high AGI levels.
•Tighten rules on pass‑through income, related‑party transactions, and loss harvesting.
•Capital income reforms (high impact, moderate complexity)
•Narrow the gap between top capital‑gains/dividend rates and ordinary income for very high earners.
•Remove step‑up in basis at death (or add a realization-at-death rule) so large unrealized gains are taxed at least once.
•Curb the carried‑interest preference; modernize derivatives and interest‑deduction rules to reduce deferral and mismatches.
•Surtaxes or higher top brackets (visible, simpler)
•Add a small surtax on very high AGI (e.g., above multimillion thresholds) rather than a large across‑the‑board hike.
•Keep combined federal/state top rates in a range that empirical work suggests won’t sharply reduce reported income.
•Estate and gift tax fixes
•Lower very high exemptions, curb valuation discounts and certain trust strategies, and improve compliance.
•Wealth‑tax style options (hardest to administer)
•If pursued, limit to ultra‑high net worth with low rates, strong third‑party valuation/reporting, and clear rules for illiquid assets; otherwise, consider a minimum tax on large unrealized gains or a deferral charge instead.
A pragmatic middle‑ground recommendation
•Prioritize base‑broadening and enforcement, align capital‑gains/dividend rates more closely with ordinary income for top brackets, end step‑up in basis, and add a modest high‑income surtax. This combination raises revenue, targets avoidance rather than work, and addresses inequality with fewer efficiency costs than a big jump in headline rates.
•If additional revenue is needed, strengthen the estate/gift tax base before considering a broad annual wealth tax.
If you tell me which country and which taxes you have in mind (income, capital gains, estate, wealth), and your top goals (e.g., revenue, growth, inequality), I can sketch a concrete package with thresholds and rough revenue ranges.