Follow by Email

Sunday, October 11, 2015

High Taxes and High Prosperity

The grueling debate about taxes seems to be ignoring the historical record.

The greatest period of American prosperity which was after WWII top marginal  taxes for really rich people was:
(1951), 91.0% income above $1,766,108

(1961) 91.0% income above $3,071,492

(1976) 70.0% for income above $807,009
And the tax loopholes for the rich were very minimal so revenue could actually flow to the many important projects and functions that were the underpinning of the general prosperity.

In that period the United States built roads, bridges, a great military, fabulous education system, great universities, funded medical and science research which resulted in historic breakthroughs, and NASA went to the moon.

American companies flourished and inventions, patents, and great new products were the envy of the world. 

American workers made good wages and good products. People had pensions and most jobs came with benefits.

YOU decide what all this means.

I for one conclude that high taxes didn't hurt the rich, they were still very rich. I was going to the university in 1964-68 in New York City and believe me the brownstones and penthouses on the toniest streets in the Big Apple were FABULOUS. The Hamptons were alive with the rich and famous. I've never seen more limousines and fancy-dressed doormen. The Four Season's was always overbooked and who could afford those great meals and wines!

High taxes did not discourage investment and the creation of industries and jobs. In fact, it was the zenith of American prosperity. So why are we not looking back at that "golden age."

That was before "free trade" agreements and super sophisticated schemes for hiding corporate and private income in offshore companies and numbered accounts in Ireland and the Cayman Islands? There were few to no "hedge funds" and much less predatory manipulation of capital.

A few super rich do not a prosperous nation make. And in elections huge money was much less influential while today we see headlines in the New York Times such as, "From Only 158 Families, Half the Cash for 2016 Race." (http://www.nytimes.com/interactive/2015/10/11/us/politics/2016-presidential-election-super-pac-donors.html?hp&action=click&pgtype=Homepage&module=second-column-region&region=top-news&WT.nav=top-news)

And it should be clear that during these glorious years there was very little accusation that all of this was "socialism" and Republicans as well as Democrats supported this model of governance.

YOU can research income taxes at the official web site:
http://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-brackets





No comments: