Short answer: It depends on what you want the tax system to achieve. If your top goals are reducing inequality and raising revenue for public investment with limited impact on growth, a well‑designed increase on very high incomes and wealth-derived gains can be justified. If you prioritize maximizing investment, entrepreneurship, and international competitiveness, you might prefer tightening enforcement and broadening the base without higher headline rates.
Key arguments for higher top rates
•Ability-to-pay and diminishing marginal utility: A dollar has less value to a multimillionaire than to a median earner, so higher marginal rates can improve overall welfare.
•Revenue and inequality: Concentrated income/wealth means small rate hikes or base changes at the top can raise meaningful revenue and modestly reduce after‑tax inequality.
•Target rents, not productive investment: Sur‑taxes on very high incomes, monopoly rents, and capital gains at death can focus on windfalls rather than new investment.
Key arguments against higher top rates
•Behavioral responses: High earners can shift income across forms, time, or borders; poorly designed hikes may raise less revenue than expected and distort decisions.
•Competitiveness and mobility: Very high combined federal‑state rates may discourage location‑sensitive talent or risk‑taking.
•Complexity and enforcement: Without closing loopholes and improving administration, higher rates can widen the gap between statutory and effective rates.
If you do favor “higher,” design matters more than the headline number
•Target the very top: Add surcharges only above high thresholds (e.g., $2–5M of annual income) to avoid hitting broad professional classes.
•Broaden the base before raising rates: Limit preferential rates and deferrals on capital income; tax large unrealized gains at death; tighten pass‑through and carried‑interest rules.
•Strengthen enforcement: Fund audits and reporting, including international information sharing, to curb evasion and aggressive avoidance.
•Mind interactions: Consider combined federal‑state rates and phase‑outs to avoid sharp marginal tax-rate spikes.
If you’re skeptical of higher rates but still want revenue/progressivity
•Close obvious loopholes and improve compliance first.
•Use progressive consumption taxes or carbon dividends with rebates.
•Expand work incentives (e.g., earnings subsidies) instead of rate hikes.
Happy to tailor a concrete package if you share your goals (e.g., how much revenue to raise, which behaviors to protect or discourage, and where you think “wealthy” begins).