We all know when the good times were, we agree on that – Tea Party or Occupy Wall Street we all know that the post World War II years the 50s, the 60s, through the 70s, despite disco even, those were the “good times.”
Our parents could buy a house, a car, put the kids through college, go on vacation, all on one paycheck, Mom could even stay home and pack the school lunch in the Davy Crockett lunch box and they could do all that and still retire to Florida at 65.
But what most people don’t realize with all the talk about how taxes in this country just can’t be raised, no matter what, (they turned a three letter word into a four letter word) and everyone’s convinced they’re paying too much taxes is that from 1946 through the early 60s the top marginal tax rate varied from 82.1% to 91% (from 1951-64)!
They raised the top rates to pay for WWII, and after the war the to allay the debt. But a funny thing happened. The people who made over $400,000 (the top tax bracket in 1946 just like today which seems ridiculous in the age of billionaires, no?) millionaires said, we don’t mind paying, so they kept it. They kept the top rate at 91% so the Rockefellers and DuPonts paid higher taxes, and corporations paid higher taxes too (top rate 25%, but fewer dodges available), at the same time that unions were at their peak and a full one third of the labor force of the country belonged to a union, driving up wages for everybody… and guess what we did during that period?
- Rebuilt Japan
- Rebuilt Europe
- Put a man on the moon
- Built the interstate highway system
- Built massive infrastructure projects like airports, bridges, tunnels, mass transit systems
- Fought the cold war
- Fought the Vietnam war (oops)
- Built an educational system including a system of state colleges and universities that was the envy of the world
- Fed the world
- Cured diseases (polio, small pox)
- Achieved more equality and class mobility than any society in the history of history
I mean we did all that and more and were the economic colossus of the world that grew and expanded and exploded with innovation and entrepreneurship and stuff that everyone around the world wanted. And nobody, nobody said “I’m not going to invent something and get rich because the government is just going to take my money at 91%.”
Nobody ever turned down being rich because of taxes.
The real answers are:
- Change the mindset that taxes are punitive, government is the bad guy and that small government is a worthy goal or rational possibility in a country of 310,000,000 people – the most intricately sophisticated society ever created.
- Create more tax brackets that more fairly reflect the vast diversity of incomes. We have only 7 brackets today. In the 20s and 30s there were dozens of brackets and as late as 1980 there were 16. The flatter, less progressive taxes that the right argues for are not only less fair, they’re less sustainable. The Progressive Caucus Budget included this model adding to the existing 7 brackets taking it up to a still historically low 12:
- $1 – 10 million: 45%
- $10 – 20 million: 46%
- $20 – 100 million: 47%,
- $100 million – $1billion: 48%
- $1 billion and over: 49%
3. Unions to lift the middle class.
Find the data.org has a great chart to find the top income tax and capital gains tax rates for each year since 1913.
This Business Insider article The History of Tax Rates is very cool, lots of charts.