>> So, why not raise the rates?

As I keep saying, because you'll provoke capital flight. Better 39% of a dollar than 95% of nothing.

>> And therefore, a billionaire's kids should pay the same tax rate as my grandsons.

Of course they should pay the same taxation sliding scale as your grandsons. The only big difference is dividends that attract lower rates which is perceived as unfair when wealthier individuals earn more in dividends than salary.

FWIW, imputation credits mean that dividend tax in NZ is at most 5%, because the tax already paid by the company is imputed against the recipient's tax. Bush proposed something similar, commenting that "double taxation is bad for our economy and falls especially hard on retired people". Under Obama, those in lowest tax brackets pay 0% on dividends while a 3.8% NIT tax was added to the 15% paid by middle class investors to help fund the ACA followed by Obama's rate increase to 20% for wealthier earners in 2013. Since then I know more than a few investors who no longer book dividends in the US, so now the IRS gets 0%.

>> Nice narratives. The billionaires love them.

What's gotten into you? I'm trying to explain why punitive taxes don't work if capital flight involves a press on a keyboard. If they maneuver to avoid a tax increase from 15% to 20%, what will they do for your 95% tax?