That 90% tax on bonuses

The House passed a bill that would tax some of the Wall Street bonuses at 90%. That's a very high tax rate. It's almost as bad as the "There’s one for you, nineteen for me," in the Beatles' "Tax Man." Supposedly the Beatles actually faced a 95% tax rate.

I doubt the 90% tax rate is going to survive. Obama seems a little hesitant. It's definitely punitive, and I don't like legislation that comes out of anger. I think this will be seriously modified in the Senate.

What I am hoping will happen is that raising the top marginal tax rate will suddenly look a very moderate and modest move. You don't like 90% for your bonus? How about 39% on your total income? Much better, no?

And thus, hopefully, we will come a little closer to eliminating the deficit.

The silver lining of Daschle's tax problems

So Tom Daschle also has tax problems. Oops. From what I can tell, this may be an honest mistake. He had the use of a car from a company he worked for, and mostly used it for personal business. So he had to pay taxes on that. And there was apparently a "clerical error" involved in some other part of it. I'm not going to worry about that much of it. It doesn't look good, but I think he'll make it through.

It does bring up an issue that I expect will become a talking point for Obama; increasing audits on the wealthy. I haven't done any specific research on how the Bush administration treated audits for the upper classes, but I do recall reading that the number of audits for high-income taxpayers went down under Bush. Which would absolutely not surprise me. It would surprise me if tax enforcement on the rich got tougher under Bush.

So the silver lining of this little issue of the missing $128,000 in taxes, along with Geithner forgetfulness, means one thing: if voters/activists/Congresspeople start making noise about upping the enforcement on rich people paying taxes, ain't no way in hell either Mr. Geithner or Mr. Daschle is going to say a word. Which may mean that the American people just might support a higher budget for the IRS. Stranger things have happened.