This is why capital gain taxes are generally different from income taxes (the previous are lower and can be offset by losses to prevent risk taking).

Social security and Medicare are funded directly via payroll taxes, they are not part of he general fund and you pay for them separately. Comparing them is like comparing medical insurance premiums or 401k savings to military spending.

Social Security and Medicare taxes have always been mixed in with regular income taxes. The government “borrows” money from the social security fund and issues the funds IOUs. There is no separate account where money is stashed away and only spent on SS and Medicare.

> Social Security and Medicare taxes have always been mixed in with regular income taxes

No, they never had. In fact, 47% of the population doesn’t pay income taxes at all, just payroll taxes, which are capped rather than progressive (anti progressive, actually).

The government does borrow money via IOUs to fund things like military mostly, but they also borrow money via treasuries, are you saying China’s export surplus should be mixed with regular income taxes as well?

Despite all of the accounting tricks, at the end of the day, “payroll taxes” are spent to fund every part of the government just like all of the other taxes. We just happen to have a surplus now.

Once the tide turns and social security is running at a deficit, regular income tax will have to pay for social security. It’s all the same money.

We already don’t have a surplus in payroll taxes, and will in a decade or two run out of the money already lent to the general fund. Still, that money has already been allocated and Americans have been paying for it specifically. If congress meant otherwise, they should have included it as a benefit paid for via taxes, but they didn’t set t up that way at all.

Congress only "means" what makes them look good for the next election cycle. But sooner or later, either benefits will have to be cut, or taxes raised. Either way Congress won't be able to do what they said they could do.

> When you “tax the rich at 90%” it disincentivizes people from working

It reduces the incentive to sacrifice other things for additional income once you've already reached the level at which the increased tax kicks in, yes.

Why is this a bad thing?

So what is a “fair” amount that people should earn? I bet the people living in the Midwest would love to tax the “liberal west coast elite” living in Silicon Valley 90%. Should 90% start at $150K? $200K? Or is the definition of the “rich” “anyone who makes more than I think I will make”.

> So what is a “fair” amount that people should earn?

I reject both the concept and it's relevance; no marginal tax rate below 100% is an income ceiling, and setting marginal tax rates at particular levels neither requires nor implies that a single such “fair” amount exists.

> I bet the people living in the Midwest would love to tax the “liberal west coast elite” living in Silicon Valley 90%

I bet most of the low income population of the West Coast (and Bay Area in particular) would like that—and benefit from it, in terms of effects on local cost of living—more than anyone in the Midwest.

> Should 90% start at $150K? $200K?

I didn't actually endorse a 90% marginal rate for federal income tax; disagreeing with a particular argument against a thing isn't endorsing it.

If I were to propose rewriting marginal rates, I'd probably do something like drop the 32% bracket down to start at about the 90th individual income percentile (instead of about the 95th, where it is currently), and drop the existing higher brackets in favor of adding additional +8% brackets at the 95th, 97th, 98th, and 99th percentiles, topping out at a 64% rate.

But more important, I'd tax capital gains as normal income, with options for both advance recognition and deferment to handle irregular streams (whether from capital events or otherwise.)