Top Tax Bracket in the 50's was 90%, yet US prospered
Replies
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I'm not asking for comparison.
You are. It's the entire point of the thread. And you go on to do it more here:Besides, who the hell wants to go back? We must move forward. But do we do so ignorantly as the screamin' no-tax people say, or do we review history and evaluate what worked as well as what didn't? The question is not flawed, your interpretation of it is because you equate only the negative with the 50's or do you equate only the negative with President Eisenhower? If today's conservatives can bow at the altar of Ronald Reagan, also a figure of the past btw, why can't they acknowledge another conservative, Eisenhower, who was actually a war hero and not simply a B-rated movie star who served in the war in a movie studio???
The irony is that often we modern Americans look on the 50's as totally negative, yet we forget the good things. Both of these extremes is to our detriment. We had a trade surplus in the 50's, the dollar was strong. We still made steel here. Infrastructure was important - hell, Eisenhower's policies built the interstates to name just a few. So, were those investments in American infrastructure for nothing? Are those same investments today not worthy? The jingoists today say that increasing the tax rate will ruin the country and completely disregard the past when it worked. The jinogists today, I argue, don't care one whit about a competitive America but instead seek to make the rich richer.
-Debra
You mention the trade surplus. Yes there was one. And like I said, it's because the rest of the world was just getting out of WWII. Shall we have another one of those?
Yes we made steel here. Specifically HERE, where I live. My city is still known for it's steel past. And only now, many decades later, is the air starting to be clear again. These are not simple issues.
It's not just numbers. It's not tax rate and GDP alone. If it were it would be easy.0 -
The jingoists today say that increasing the tax rate will ruin the country and completely disregard the past when it worked.
Just because a 90% tax rate existed doesn't mean it was good or it worked. Anyone a 90% tax rate would affect would have ample time to work around it. It would happen now and it surely happened then.
As far as the US prospering goes... Two recessions and uncontrollable inflation occurred in the 50s but at least the rich paid their "fair share"!
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It's too easy to vilify taxes and praise low spending - but it is not productive.
-Debra :drinker:0 -
It's too easy to vilify taxes and praise low spending - but it is not productive.
-Debra :drinker:
Im curious. In your opinion, what should the tax rate presently be for the wealthy? Also, in your opinion, should the lower 50% of income earners continue to not pay any income tax?0 -
I'm not asking for comparison.
You are. It's the entire point of the thread. And you go on to do it more here:Besides, who the hell wants to go back? We must move forward. But do we do so ignorantly as the screamin' no-tax people say, or do we review history and evaluate what worked as well as what didn't? The question is not flawed, your interpretation of it is because you equate only the negative with the 50's or do you equate only the negative with President Eisenhower? If today's conservatives can bow at the altar of Ronald Reagan, also a figure of the past btw, why can't they acknowledge another conservative, Eisenhower, who was actually a war hero and not simply a B-rated movie star who served in the war in a movie studio???
The irony is that often we modern Americans look on the 50's as totally negative, yet we forget the good things. Both of these extremes is to our detriment. We had a trade surplus in the 50's, the dollar was strong. We still made steel here. Infrastructure was important - hell, Eisenhower's policies built the interstates to name just a few. So, were those investments in American infrastructure for nothing? Are those same investments today not worthy? The jingoists today say that increasing the tax rate will ruin the country and completely disregard the past when it worked. The jinogists today, I argue, don't care one whit about a competitive America but instead seek to make the rich richer.
-Debra
You mention the trade surplus. Yes there was one. And like I said, it's because the rest of the world was just getting out of WWII. Shall we have another one of those?
Yes we made steel here. Specifically HERE, where I live. My city is still known for it's steel past. And only now, many decades later, is the air starting to be clear again. These are not simple issues.
It's not just numbers. It's not tax rate and GDP alone. If it were it would be easy.
The only thing you can really take away from the discussion is that there is little or no correlation between marginal tax rates and economic prosperity. In our times of great prosperity we had extremely high marginal tax rates, during the 1990s marginal tax rates were increased yet we experienced economic growth. For the past decade we have the lowest tax rates most of us have experienced in our lifetimes, with weak and anemic growth. In the 1980s, cutting the highest rates probably contributed to economic growth (although not as much as the significant increases in Federal spending), and the subsequent 11 tax increases during Reagan administration didn't seem to have much negative effect either. Different times call for different measures.
I am not trying to say "high taxes = good, low taxes = bad". I am just saying that the histrionic bleating of conservatives that ANY raise in income taxes would cause economic Armageddon is beyond stupid. It's just another distraction preventing a serious discussion of how to tackle our economic problems.
And what are we actually talking about here? An increase in the top marginal tax rate from 35% to 39.6% for people making over $250,000 per year. Bahet can correct me if I am wrong, but I believe this is $250,000 AFTER all deductions and adjustments. And only income > $250,000 is subject to the extra 4.6% .
So someone who is subject to this tax, first of all, will be making a LOT more than $250,000.
For someone with a taxable income amount of $275,000, the extra tax would be $1,150. For someone with a taxable income of $1,000,000, the extra tax would be $34,500. Not exactly a proletarian uprising.
I don't make anywhere near that kind of income, but I endured a tax increase this past year almost quadruple what someone with a net income of $275,000 would face under the Obama plan. Our income increased modestly last year (my wife is one of those greedy, lazy public school teachers who got a raise-- we spend the summers sipping mint juleps on the veranda and watching our dressage horse in the back yard). It wasn't that much, but it was enough to push us above the threshold where we lost a number of deductions and we also lost a child tax credit. The result was that my tax bill almost doubled from 2010.
That sucked, and I missed getting the big refund, but it's not like it destroyed us financially.
So using the "I knew a guy......" and "N=1" standard of evidence that seems to be the preferred norm here, I can conclude definitively that raising taxes on the rich would have no negative effect whatsoever.0 -
It's too easy to vilify taxes and praise low spending - but it is not productive.
-Debra :drinker:
Im curious. In your opinion, what should the tax rate presently be for the wealthy? Also, in your opinion, should the lower 50% of income earners continue to not pay any income tax?
If we are going off in this direction, let's start with some facts. I wrote this a week ago, but I think it will work here as well.
Here is an abstract from the most recent study published by the Tax Policy Center:About 46 percent of American households will pay no federal individual income tax in 2011,
roughly half of them because of structural features of the income tax that provide basic
exemptions for subsistence level income and for dependents. The other half are nontaxable
because tax expenditures— special provisions of the tax code that benefit selected taxpayers or
activities—wipe out tax liabilities and, in the case of refundable credits, result in net payments
from the government. Most important of those tax expenditures are provisions that benefit senior
citizens and low-income working families with children. While those factors particularly affect
lower-income households, different provisions eliminate taxes for other households. Itemized
deductions and credits for children and education are more important for middle-income
households, while the relatively few high-income nontaxable households benefit most from
above-the-line and itemized deductions and reduced tax rates on capital gains and dividends.
You can read the entire report here:
http://www.taxpolicycenter.org/UploadedPDF/1001547-Why-No-Income-Tax.pdf
Or you can read a summary here:
http://www.forbes.com/sites/beltway/2011/07/27/why-do-some-people-pay-no-federal-income-tax/
Yes, THAT Forbes Magazine (Et tu, Malcolm?)
Half the people who pay no federal income tax do so because of low incomes--basically, the laws exempt people with "subsistence" level incomes from paying federal tax. What percentage of "subsistence" do you think people should be paying in federal taxes? A bowl of gruel? A sack of toenail clippings?
Of the remaining half, 75% of those are exempt because of tax provisions that benefit seniors and working families with children. Tell Granny to skip the next prescription refill. Donnie Trump needs a tax break......
It should also be noted that almost all of the tax laws that included the provisions that keep people from paying federal tax were passed under Republican administrations--Ford, Reagan, and GWBush. (I believe there was also an expansion of the EITC under Clinton, but it was started under Ford and expanded also by Reagan). They were passed because, in an earlier time of sanity, even Republicans had a small sense of social conscience, and there was a consensus that these were helpful anti-poverty measures. They were also passed during times when Democrats and Republicans were still able to find some common ground.
It also needs to be emphasized that the increase in numbers of people who pay no federal tax is a reflection of the fact that in the past 30 years, the bottom 60% of the people in this country have seen virtually no increase in their incomes. The increase in those numbers is evidence of the overall decline in the middle and working classes, not because of an increase in "freeloaders". And those people still pay plenty of taxes--they pay a disproportionate share of their incomes in sales taxes, payroll taxes, medicare taxes, local taxes -- and many pay property taxes as well. They have plenty of "skin in the game"--in fact, that's sometimes all they have left to give.0 -
You wouldn't have the right to vote as a women if it wasn't for unions & the support given back & forth for the women's suffragists.Perhaps it helped that from the top down there was respect from the bosses to those who did the work!
So explain to me why we needed to create giant powerful unions whose greed has torn apart our country? Because of all those happy, well-respected workers living behind picket fences in your imaginary utopia?
be realistic.
It's amazing how the average person in the world is so incredibly dense that they are against the only organisation in the last 200 years which has really improved their standard of living.
The utter stupidity over the average person knowns no bounds, working class people defending a system which systematically uses & abuses them.
Most the USA is suffering from Stockholm syndrome.0 -
I'm all for redistribution of wealth. I'm fine with a small amount of stratification, early retirement, personal and family wealth, but vast riches in a few hands is really vast resources, and a few people shouldn't own the world's resources, I don't care who they are.
Now as far as the 50s and 60s, we could consider the possibility that we are less well off in part because our advanced technology (including medical) costs more to create and maintain than technology of the past. We could argue that energy is scarcer and the cost higher. I don't know if this is true, but it's something to consider when looking at past prosperity.
We must also consider that a good portion of the US (non-white especially) was not as likely to be enjoying that prosperity as stereotypical middle class whites enjoyed. In a world of limited resources, for all to have an equal share, some must have less. I do not believe that this is the main cause of our decline in standard of living, but for the sake of argument, it should be considered as a possible factor.
And speaking of some having less so more can have an equal share, all the rich nations of the world are now taking labor and resources from poorer nations. We have fewer jobs here but more 'stuff'. Why? We import. A dangerous trend that makes us dependent debtors. Who profits from our state of debt and dependency? Multinational corporations for the most part.
When we speak against a few holding the world's vast resources, we must also consider that we are all among that few, which leaves the question: Is the American way of life sustainable at all? And if not, what are we to do about it?0 -
You wouldn't have the right to vote as a women if it wasn't for unions & the support given back & forth for the women's suffragists.Perhaps it helped that from the top down there was respect from the bosses to those who did the work!
So explain to me why we needed to create giant powerful unions whose greed has torn apart our country? Because of all those happy, well-respected workers living behind picket fences in your imaginary utopia?
be realistic.
It's amazing how the average person in the world is so incredibly dense that they are against the only organisation in the last 200 years which has really improved their standard of living.
The utter stupidity over the average person knowns no bounds, working class people defending a system which systematically uses & abuses them.
Most the USA is suffering from Stockholm syndrome.
Do not call us stupid for this, please. We were never taught this as part of our history. If it was even mentioned at all, it was never emphasized. Americans are also not taught important skills in early education such as logic, debate, and ethics. I sometimes am guilty of holding my countrymen in contempt for that, but it's really not fair to.
Our education system is designed to create and maintain a mental state that is not conducive to reasoning or problem solving. We desperately need an overhaul of that system and a new emphasis on teaching children not what to think, but how to think.0 -
It's too easy to vilify taxes and praise low spending - but it is not productive.
-Debra :drinker:
Im curious. In your opinion, what should the tax rate presently be for the wealthy? Also, in your opinion, should the lower 50% of income earners continue to not pay any income tax?
If we are going off in this direction, let's start with some facts. I wrote this a week ago, but I think it will work here as well.
Here is an abstract from the most recent study published by the Tax Policy Center:About 46 percent of American households will pay no federal individual income tax in 2011,
roughly half of them because of structural features of the income tax that provide basic
exemptions for subsistence level income and for dependents. The other half are nontaxable
because tax expenditures— special provisions of the tax code that benefit selected taxpayers or
activities—wipe out tax liabilities and, in the case of refundable credits, result in net payments
from the government. Most important of those tax expenditures are provisions that benefit senior
citizens and low-income working families with children. While those factors particularly affect
lower-income households, different provisions eliminate taxes for other households. Itemized
deductions and credits for children and education are more important for middle-income
households, while the relatively few high-income nontaxable households benefit most from
above-the-line and itemized deductions and reduced tax rates on capital gains and dividends.
You can read the entire report here:
http://www.taxpolicycenter.org/UploadedPDF/1001547-Why-No-Income-Tax.pdf
Or you can read a summary here:
http://www.forbes.com/sites/beltway/2011/07/27/why-do-some-people-pay-no-federal-income-tax/
Yes, THAT Forbes Magazine (Et tu, Malcolm?)
Half the people who pay no federal income tax do so because of low incomes--basically, the laws exempt people with "subsistence" level incomes from paying federal tax. What percentage of "subsistence" do you think people should be paying in federal taxes? A bowl of gruel? A sack of toenail clippings?
Of the remaining half, 75% of those are exempt because of tax provisions that benefit seniors and working families with children. Tell Granny to skip the next prescription refill. Donnie Trump needs a tax break......
It should also be noted that almost all of the tax laws that included the provisions that keep people from paying federal tax were passed under Republican administrations--Ford, Reagan, and GWBush. (I believe there was also an expansion of the EITC under Clinton, but it was started under Ford and expanded also by Reagan). They were passed because, in an earlier time of sanity, even Republicans had a small sense of social conscience, and there was a consensus that these were helpful anti-poverty measures. They were also passed during times when Democrats and Republicans were still able to find some common ground.
It also needs to be emphasized that the increase in numbers of people who pay no federal tax is a reflection of the fact that in the past 30 years, the bottom 60% of the people in this country have seen virtually no increase in their incomes. The increase in those numbers is evidence of the overall decline in the middle and working classes, not because of an increase in "freeloaders". And those people still pay plenty of taxes--they pay a disproportionate share of their incomes in sales taxes, payroll taxes, medicare taxes, local taxes -- and many pay property taxes as well. They have plenty of "skin in the game"--in fact, that's sometimes all they have left to give.
Thanks for the info but neither of my original questions was answered. Since you responded, what rate should the wealthy pay and should those who pay no income tax, presently, continue to not pay, going forward?0 -
I think that all this talk about how the 50s were different because we exported to a devastated Europe or because we built steel or because unions hadn't yet ruined everything is disproved by this one graph.
[From: http://krugman.blogs.nytimes.com/2012/07/18/compensation-too/ ]
Despite the trade deficit, despite the decline in manufacturing employment, despite the evil unions, the US produces 3.5 times as much per person as in 1950. Yet since the mid-70s, none of the benefit of that increased production has gone to workers.0 -
I think that all this talk about how the 50s were different because we exported to a devastated Europe or because we built steel or because unions hadn't yet ruined everything is disproved by this one graph.
Despite the trade deficit, despite the decline in manufacturing employment, despite the evil unions, the US produces 3.5 times as much person as in 1950. Yet since the mid-70s, none of the benefit of that increased production has gone to workers.
Oh now that's an eye opener. Now what can workers do about it?0 -
Ahhh, that's a great question. My opinion? Don't vote for the party whose primary goal since 1980 has been transferring even more of that productivity growth to the top 0.1%.0
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Ahhh, that's a great question. My opinion? Don't vote for the party whose primary goal since 1980 has been transferring even more of that productivity growth to the top 0.1%.
I don't. I don't vote for either of those parties, though, because I don't see enough difference between them. I look really hard, but I just don't see it. Possibly the worst thing done to workers in our lifetime was Clinton's free trade spree with China and other countries, without even insisting on human and worker rights.0 -
I think that all this talk about how the 50s were different because we exported to a devastated Europe or because we built steel or because unions hadn't yet ruined everything is disproved by this one graph.
Despite the trade deficit, despite the decline in manufacturing employment, despite the evil unions, the US produces 3.5 times as much person as in 1950. Yet since the mid-70s, none of the benefit of that increased production has gone to workers.
Oh now that's an eye opener. Now what can workers do about it?
Your graph illustrates an interesting point. When compensation was at its peak we were in the beginnings of a significant recession. As wages dropped, millions of jobs were created. Any correlation?0 -
You wouldn't have the right to vote as a women if it wasn't for unions & the support given back & forth for the women's suffragists.Perhaps it helped that from the top down there was respect from the bosses to those who did the work!
So explain to me why we needed to create giant powerful unions whose greed has torn apart our country? Because of all those happy, well-respected workers living behind picket fences in your imaginary utopia?
be realistic.
It's amazing how the average person in the world is so incredibly dense that they are against the only organisation in the last 200 years which has really improved their standard of living.
The utter stupidity over the average person knowns no bounds, working class people defending a system which systematically uses & abuses them.
Most the USA is suffering from Stockholm syndrome.
Do not call us stupid for this, please. We were never taught this as part of our history. If it was even mentioned at all, it was never emphasized. Americans are also not taught important skills in early education such as logic, debate, and ethics. I sometimes am guilty of holding my countrymen in contempt for that, but it's really not fair to.
Our education system is designed to create and maintain a mental state that is not conducive to reasoning or problem solving. We desperately need an overhaul of that system and a new emphasis on teaching children not what to think, but how to think.
In many schools, that is the new emphasis. My wife has been involved in the implementation of that type of teaching system at her school.
And even though she is a lazy public school teacher who belongs to a union and whose greed is tearing our country apart, she is meeting her teammates multiple times this summer at our house to try and plan next year's curriculum and teaching strategies--that it, when she can tear herself away from the spa and the dressage horse.
It's not easy to do and it's not something that happens overnight. And progress is complicated by the same social factors that stymie all other attempts to improve education. But most public schools in the area where I live are adopting the same models.0 -
Best way to stop workers from wanting to be in unions is to not treat them like ****.0
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I think that all this talk about how the 50s were different because we exported to a devastated Europe or because we built steel or because unions hadn't yet ruined everything is disproved by this one graph.
[From: http://krugman.blogs.nytimes.com/2012/07/18/compensation-too/ ]
Despite the trade deficit, despite the decline in manufacturing employment, despite the evil unions, the US produces 3.5 times as much per person as in 1950. Yet since the mid-70s, none of the benefit of that increased production has gone to workers.
I am sure none of that increased productivity has anything to do with technology or automation. Just because a machine is doing the work 10 workers used to do in the same amount of time doesn't mean the remaining workers deserve a pay increase.
An employer will never pay you what you think you are worth. They will pay you what they can get away with paying you in order to keep you doing your job. If you don't like that then quit and find a job that pays more. If enough people will not do a job for a certain amount then the employer will have to raise compensation to attract workers.0 -
[From: http://krugman.blogs.nytimes.com/2012/07/18/compensation-too/ ]
Despite the trade deficit, despite the decline in manufacturing employment, despite the evil unions, the US produces 3.5 times as much per person as in 1950. Yet since the mid-70s, none of the benefit of that increased production has gone to workers.
Look at that? Immediately, I thought of the last public company I worked for, one of the last to actually manufacture technology in my county, and who made a handsome, enviable profit. Said company then outsourced all their quality manufacturing, experienced failures and problems galore, and five years later, brought back manufacturing but at, literally 1/2 the hourly wage and benefits? What benefits? These new people don't even get a living wage. Think the quality is any better than the outsourced work? Hell no. This company dismissed the best workers it had and, in an effort to return to a quality product, wanted to get it on the cheap. No one is winning on that front except the executives who have a nice comfortable salary and benefits.
I think that the 1950's correlation is again appropriate here. Lour indicates that no one is ever paid what they think they are worth. Not true. At above company, when the original manufacturing was in place with $8 - $15 hr asembly jobs and benefits, most were thankful and gracious. I can count on one hand the 12 years I was there the people who came in to ask/demand a raise. They knew their skills and level, were paid fair, and were content. Just like my dad and others in the 1950's. No one wanted more more more like they do now. The houses were smaller, families ate at home much more often, etc. It wasn't perfect but the average person was content .
For my part, I had to manage my team throughout all of this crap. They never let me or my team go. Finally, in phase 3 of the above process, I gave notice (3 months, aren't I generous?) and left on my own. This chart shows who is actually getting the reward for all of the productivity. It comes down to your definition of fairness. For my part, I'm no longer willing to shoot workers in the foot to support stockholders or executives.
-Debra0
