Editore"s Note
Tilting at Windmills

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March 8, 2009

SOAKING THE RICH (REDUX).... Hilzoy had a great overnight item on the odd conservative complaints about President Obama's proposal to raise the top marginal tax rate to 39.6% -- where it was under Clinton, and where it was intended to be in 2011 based on George W. Bush's plan. Hilzoy compared a 39.6% against other major capitalist democracies, and just as importantly, against other modern U.S. presidents.

Hilzoy concluded, "All in all, it seems as though we've been suffering through an awful lot of socialism and class warfare all over the world, much of it at the hands of people conservatives claim to admire. If a top marginal rate of 39.6% is enough to make society's producers and creators go on strike, then Galt's Gulch must be getting pretty crowded."

top_rates.jpg

Quite right. But I also thought it would be helpful to add a visual element to this.

John Cole posted this graph a few days ago. See that column on the far-right edge? That's where Obama proposes the marginal top-rate should be.

It's also the rate conservatives believe is so outrageous, that they're accusing the president of "socialism" and talking openly about the "Going Galt" scenario in which wealthy and industrious Americans would deliberately make less money to spite their country.

It's all quite silly, but the graph adds some helpful context to drive the point home.

Obama is proposing a top rate lower than Reagan's first term, lower than Nixon's, lower than Eisenhower's, and lower than FDR's when he pulled us out of the Great Depression.

So, really, try not to hyperventilate.

Steve Benen 9:30 AM Permalink | Trackbacks | Comments (49)

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Comments

One thing I rarely see mentioned is that, when Bush's big tax cuts were being negotiated in Congress, the Reps were given a choice between permanent moderate tax cuts and short-term large ones. They chose the big ones and immediately began lobbying to make them permanent.

Posted by: anandine on March 8, 2009 at 9:31 AM | PERMALINK

Unfortunately, the Galtists are not interested in facts; they're only interested in getting people to fall for their "Red Scare Ponzi Scheme." They ought to hyperventilate a bit less, and do a little more "putting their money where their mouth is" by actually doing what they're trying to get the rest of the country to do. "Going Galt" is nothing more than an ugly joke until that happens, y'know....

Posted by: Steve W. on March 8, 2009 at 9:32 AM | PERMALINK

It's worth remembering that conservatives are very panicky people.

Posted by: dr2chase on March 8, 2009 at 9:34 AM | PERMALINK

To elaborate -- really, honestly good at imagining scary outcomes, and getting very worried about them. Gays can marry? Dogs and dolls will be next! I pretty much blame "Cops!" and "America's Most Wanted" all these scary-predator crime shows for some of the get-tough-on-crime 3-strikes laws that we have nowadays. And it's probably wrong to make fun of them (like I just did); some people are just plain hair-trigger scared.

A garden club that I'm a member of, is waiving dues for the next year for various reasons, but among them, is that people in a panic make silly economies, and might decide to let their membership lapse instead of ponying up $10 to stay current. We don't want to pitch it like that, but we DO want to keep our members, and we're thinking of saying something like "spend it on your garden, not on us".

In our town (in a relatively wealthy suburb of Boston, which is to say, our median income, is the US 80th percentile) we have people determined to cut services and avoid tax increases "because of these tough times", ignoring the fact that most of us (I think) are either salaried, full-time, or just plain rich. Either you're working, or you're not, and if you're working, the taxes to keep the town running are affordable, and if you're not working, property taxes are the least of your problems -- you might like to maintain your 25% property value premium over similar properties in neighboring towns, in case you have to sell. I'm trying to figure out how to pitch it, but if we can afford not to lay off people, but do anyway out of a panicky sense of economy, then we are part of the problem. And "panicky" is the wrong word to use. It's very frustrating.

Posted by: dr2chase on March 8, 2009 at 9:51 AM | PERMALINK

The whole "going Galt" thing is amusing. Mr. $500,000-a-year is going to pack up his marbles and go home because he's going to get stiffed for an extra 4% on all the adjusted gross income over $250,000. And I'm supposed to throw myself on his feet and weep and beg him not to go?

Maybe Mr. Going Galt thinks he's just a wee bit more irreplaceable than he actually is. I think The Holy Free Market will cope just fine, what with all the competition it engenders and all.

Posted by: ericblair on March 8, 2009 at 10:03 AM | PERMALINK

Whomever suggests going Galt has obviously never become well-adjusted to his environment - kinda like never learning to share with the other children when playing with toys in a sandbox at around age 4! -Kevo

Posted by: kevo on March 8, 2009 at 10:07 AM | PERMALINK

I found Hilzoy's post so interesting and now yours just illuminates it. My question is why can't our media communicate this?

Posted by: Todd on March 8, 2009 at 10:13 AM | PERMALINK

Isn't this "going Galt" just a variation of the notion that we need to pay talent supersized bonuses--in the tens of millions of dollars--to "motivate" them. Because it is only the size of our paychecks that motivate us.

I mean, really. I keep wondering what they would do if they were paid less. Or when they have to pay a tiny percentage more in taxes. They wouldn't work so hard? Will they opt for a different kind of job, perhaps elementary school teachers?

It just doesn't seem something to worry about. There will always be people interested in being paid for interesting work, and norms change as to how much reward they deserve. No one is talking about eliminating all variation in income, just reducing the variance.

The conservatives will never get used to it, of course, because they are incapable of learning. And when we raise that top rate to 45% we'll hear more screaming and threats, but somehow, unless the conservatives manage to seize government again, the nation will do fine.

Posted by: PTate in MN on March 8, 2009 at 10:27 AM | PERMALINK

I'm printing this graph out and carrying it around with me so I can whip it out when I hear complaints about socialism.

As for "going Galt" - others have said it - but, as a self employed financial planner, I'll gladly pick up the castaways of the $250,000 plus club.

Posted by: mo on March 8, 2009 at 10:33 AM | PERMALINK

"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness." John Kenneth Galbraith.

Posted by: Davis X. Machina on March 8, 2009 at 10:51 AM | PERMALINK
My question is why can't our media communicate this?
Because their corporate masters pay them precisely for the purpose of obfuscating it.
Posted by: Steve LaBonne on March 8, 2009 at 10:51 AM | PERMALINK

You're adorable! Trying to fight their chicken little hysteria with facts and reality. Heh. Good luck with that.

I think the rich complaining that they're going to choose to be slightly less rich isn't going to help their cause. Anyone who is complaining about having to pay 4% more on any income over $250k and is threatening to make less-- to punish who exactly?-- is not going to get anything but anger from the American public.

Posted by: zoe kentucky on March 8, 2009 at 11:01 AM | PERMALINK

The important thing is not to lump different kinds of taxes together anyway, then talk about "taxes on the rich". The top rate isn't extremely high by historic standards, but more important is the fraudulently extolled reduced tax on capital gains, only around 15% and only subject to rise to (IIRC) 20%, whereas the regular top rate for *earned income* is going to 39.6%. Since most cap gains are just trading and only first start-up capital should get a break IMHO, the reduced CG tax is a fraud. Instead of the top going to 39.6% which I think is too high, raise all rates to around 32% but make it stick and take out loopholes.

Even better, remove the cap on FICA entirely and maybe the rate can go down to the fabled 28%. But in any case the scandal is the favoritism to the investing class, motivated essentially by their political influence and then rationalized by fraudulent or stupid commentators and economists.

BTW we should encourage companies to hire by making employee pay etc. "superdeductible": maybe multiply it 1.2x to get effective taxable income etc. but pull loopholes out. That stimulates companies to hire people and not robots, and we can even stipulate that the multiplier cannot be applied to money spent overseas, etc.

tyrannogenius

Posted by: Neil B ☼ on March 8, 2009 at 11:06 AM | PERMALINK

> going Galt

I'll bet if you look into it, what they really mean is "going pseudo-Galt"

(That's the behavior formerly known as tax evasion, now reframed as civil disobedience.)

Check it out:

Income tax crime and government responses in the United States...
"The most recent IRS estimate puts the individual tax gap at $245 billion per year."
http://www.emeraldinsight.com/10.1108/13590790910925000

That's _individuals_ not paying a quarter of a trillion dollars per year of personal taxes.

http://www.irs.ustreas.gov/pub/irs-utl/tax_gap_facts-figures.pdf

I have a proposal: everyone who makes more than, oh, $250,000 per year should be nominated to a government advisory board. As a nominee, they get a free tax checkup annually. Once their tax issues, if any, are straightened up, they get paid a dollar a year for their advice, and are given a phone number that goes to the President's voicemail. Their advice gets added to a file.

Seriously -- would $245,000,000,000.00 a year help the federal budget?

Would it restore the confidence of the little people that the rich people are carrying their fair share of the load these days?


Posted by: Hank Roberts on March 8, 2009 at 11:33 AM | PERMALINK

How can we miss them if they won't go away?

Posted by: Mnemosyne on March 8, 2009 at 11:58 AM | PERMALINK

They know that Obama knows that he is being far too easy on them and they don't want the people to know.

Posted by: Michael7843853 on March 8, 2009 at 11:59 AM | PERMALINK

HOLY COW!

Am I the only one looking at the LEFT side of the graph!

Look at it!!!!!!!!!!!!!!

Hoover knocked the top tax rate to the lowest in history during the roaring 20's. During that time, stock speculation went absolutely bonkers.
Six years after this tiny rate was implemented, The Great Depression begins.

In 1986, the rate gets almost as low under Reagan.
http://www.the-privateer.com/chart/dow-long.html

Stocks with a jump of approximately 1000 points or ~60%. In 1987, the market crashes down to about where it was before the tax cut.

Do low top tier tax rates always produce nothing but empty speculation? That much money at the top has nowhere useful to go.

Back up to 1932. Great depression starts in 1929.
Hoover reacts with fiscal discipline as the GOP recommends in depressions like ours. He raises tax rates and the economy stagnates until FDR takes the reins promising to try something different. In 1934, he jacks up taxes even higher from 60ish to 80%.

Result? Recovery.
World War II is declared in 1940 as recovery is well under way and taxes are almost the same in peace and war time.

Tax rates at least for the top didn't matter much. Spending spending spending, before and after the war (recall war spending was done by our allies on credit. We as a nation declared war in December of '41.) seems to be the key variable in play.

Kennedy and Reagan cranked back top tier rates with no obvious correlation in payback in terms of economic activity.

This dovetails with a theme I've been seeing. High taxes or inflation spur the wealthy into investing in the economy both through purchases to protect their spending power and investment to maintain their plutocratic edge of their brethren.

Obama's plan takes history into account. The wealthy will spend and invest if their future comfort is threatened. It's not class warfare folks... it's simple necessity to goad the flow of capital. The rich will become richer (in dollars, not necessarily living standard) and no one will mind that much.

The take home message: tax cuts for the rich do, with no exaggeration, NOTHING to improve economies. The Republicans are selling pure hokum.

Posted by: toowearyforoutrage on March 8, 2009 at 12:01 PM | PERMALINK

Obama isn't raising their taxes, he's just letting the Bush tax cuts expire, as Bush and the Republican Congress designed it.

Posted by: qwerty on March 8, 2009 at 12:24 PM | PERMALINK

where it was under Clinton, and where it was intended to be in 2011 based on George W. Bush's plan

But that's a lie. It was all a lie. Republicans NEVER intended for the rate to go back up. They merely assumed that they would still be in power to reinstate the tax cuts in perpetuity.

Posted by: Matt on March 8, 2009 at 12:29 PM | PERMALINK

We must take 'weary's point and blast it out there over and over, in blog comments, call in, our own blogs etc: Hoover reduced the top rate just before the Great Crash and the resulting Great Depression! We should yell over and over, "Cutting top rates led to the Stock Market Crash of '29"! Shove that down the Galtard's throats!

BTW does anyone have the historical data on differential taxation, earned versus cap gains etc for that and other period? Sure, Google as I was scolded once, but sometimes a savvy person has the best (not always on top of G) pick ...

Posted by: Neil B ♠ on March 8, 2009 at 12:38 PM | PERMALINK

The Republicans once again fail to READ. Galt's Gulch was populated by people who actually produced things for a living. There weren't any parasitic paper stretchers or inherited wealth weasels. Ayn Rand certainly had her flaws, but her disdain for those who do not actually produce anything tangible is a recurring theme throughout Atlas.

Amateurs.

Posted by: ArtEclectic on March 8, 2009 at 12:59 PM | PERMALINK

I don't know why this graph is not in every Democratic surrogates hands. It appears that top tax rates at a certain low level begin to have a definitive correlation to economic catastrophe...

Why do Republicans hate America?

Posted by: justmy2 on March 8, 2009 at 1:00 PM | PERMALINK

Justmy2, it's gonna be our job to put it there...

Posted by: Neil B ☺ on March 8, 2009 at 1:17 PM | PERMALINK

I heard the GOP's intellectual epicenter, Newt, parrot the "war on people making over $250,000 on one of the chatter shows this morning.
Figurative speech of course, using the term "War." But if figurative speech is allowed wouldn't Bush and the GOP's policies toward the working class. and middle class for that matter, be termed "a Holocaust"?

Posted by: OXYMORON on March 8, 2009 at 1:17 PM | PERMALINK

What the GOPers don't recall is how Reagan lowered the top marginal rates but ended up raising taxes during 6 of his 8 years in office.

Except those increases were largely on lower & middle class, particularly doubling SS withholding.

Plus, this "supply side miracle" led to a nearly tripling of the debt.

We were the largest creditor nation when Reagan came into office and the largest debtor nation in the world when he left.

Posted by: Burghman on March 8, 2009 at 2:28 PM | PERMALINK

http://whoisioz.blogspot.com/2009/03/hey-greaser.html

"Trying to construct a coherent personal economic ideology out of a Rand novel is as realistic, likely, and sane as trying to set up a street gang using The Outsiders as your manual."

Posted by: spudvol on March 8, 2009 at 3:00 PM | PERMALINK

The entire "Going Galt" thing is beyond ridiculous, because the Galt thing in Atlas Shrugged was about PRODUCERS.

The biggest insanity of the entire Ayn Rand philosophy is their self-aggrandizing concept that they have had that THEY ARE JOHN GALT AND HOWARD ROARKE. Nothing could be further from the truth. The right is the ANTI-GALT.

Business managers, CEOs, and financial managers ARE NOT PRODUCERS. They are only people who assist the real producers.

Who are the real producers? Well, we CAN include small business owners. We CAN include large industrialists, if they are really running their companies (and not into the ground). And we CAN include many middle managers, plus all shop foremen and line workers, machinists, truck drivers, engineers and shipping clerks.

Ross Perot was a producer, in that he built his own company and ran it. Perot is Galt. But not anyone at any investment firm, or bank or stock traders. Not by a long shot.

INVESTING IS PARASITISM. Investors are people who - in the great Randian scheme of things - think it is good and right to get rich off the labor of others.

THE ENTIRE STOCK MARKET IS ANTI-RANDIAN.

People who hire in from the outside and manage companies based on stock prices ARE NOT PRODUCERS; they are shills for stock owners/investors/gamblers/leeches (who change every second of every business day). They are BLEEDING the real producers of their rightful wealth.

Going Galt means for the LABORERS to shut down the plants, so that the investors don't have anything to bleed.

We, America, have already LOST most of our our producers, to China and India. Even Mexico has lost its producers to China and India.

The U.S. manufacturers have already long ago gone Galt, when they shipped the plants over to Asia. There isn't much left to "go Galt" with, anymore.

For the right to claim to be the inheritors of Galtism/Randian thought is to teach that black is white, red is green, up is down.

What a freaking joke.

.

Posted by: SteveGinIL on March 8, 2009 at 3:27 PM | PERMALINK

SteveGinIL wrote: "Going Galt means for the LABORERS to shut down the plants ..."

Not that I'd encourage anyone to subject themselves to such a thing, but you need to go back and read Atlas Shrugged again.

Rand makes it clear that organized labor is evil and nothing more exemplifies its evil than going on strike.

And Ayn Rand consistently conflated capitalists -- those who profit from the control and ownership of capital -- with producers of goods and services. In her imaginary, fictional world, every corporate CEO had built his own company through his own hard work and independent genius, and all of the employees were simply living off the CEO's accomplishments.

Like L. Ron Hubbard, Ayn Rand started out as a science fiction writer (with her first novella, Anthem).

Also like L. Ron Hubbard, who founded the religion of Scientology for the explicitly stated purpose of getting rich, Ayn Rand founded the religion of Objectivism -- for much the same purpose.

Posted by: SecularAnimist on March 8, 2009 at 4:03 PM | PERMALINK
Do low top tier tax rates always produce nothing but empty speculation? That much money at the top has nowhere useful to go.

There is reason to believe that that is precisely what happened over the past eight years. Money was flooding in from literally all over the world and it did, in fact, have "nowhere useful to go." The financial wizards had to find *something* for those investors to pour their money into.

Posted by: PaulB on March 8, 2009 at 5:50 PM | PERMALINK
They merely assumed that they would still be in power to reinstate the tax cuts in perpetuity.

Or that they would be successfully able to rail against the expiration as a tax "hike" and use it to bludgeon the other party. Sadly, they appear to be correct.

Posted by: PaulB on March 8, 2009 at 6:01 PM | PERMALINK

Thank you so much. As an economic historian, I have been baffled by so much willful amnesia, particularly since conservatives pretend to be so fond of history.

The graduated income tax coupled with generous unemployment and welfare benefits served as "automatic stabilizers" for many years - if the economy was overheating, incomes would be bumped into a higher range and taxes would go up, thereby cooling down the boom. Conversely, if the economy began to tank, taxes would be reduced at the same time that unemployment and welfare payments would increase, thereby putting money into the system and preventing the worst of the downward spiral toward depression.

The experience of stagflation upended the concept of automatic stabilizers. High rates of inflation pushed households into higher income brackets at a time when they were not experiencing any real growth. If you look at your graph, you can see the results.

At a time when we are still fighting two wars (the one against Al Quaeda the most serious), when our national economy could sink to a low from which it would be difficult to recover, it is hard to understand the self-centeredness of the very well-to-do who whine over higher taxes. Good heavens. They may have to forego a trip to Spago's. Can they really be that out of touch?

And if they want to place a flat tax on everything, let's start with FICA. Let's tax all sources of income the same for the social security fund. I suspect if we did so, we could do away with the matching business contribution and still have more money in the social security pot - thereby solving a major societal concern at the same time we make life easier for small businesses.

Eve: "So you're going to Hollywood ... Why?"

Bill: "I don't have to. I want to."

Eve: "Is it the money?"

Bill: "Eighty percent of it will go for taxes."

[All About Eve, 1950]

Posted by: Mary Schweitzer on March 8, 2009 at 7:27 PM | PERMALINK

This thread is petering out, but here for the record is some good data on tax rates going all the way back to 1915. It shows the exact rate schedules, not just the top rate and it's amazing, so much of the time we had those top rates up in the 60s and 70s and up to just over 90%. (BTW I don't endorse that, about 1/3 is enough IMHO but no "tricks" either.) One flaw in those tables, so far I don't see distinctions between earned income and capital gains, etc.

Posted by: Neil B ♠ on March 8, 2009 at 7:36 PM | PERMALINK

(Correction - back to 1913, when the income tax was formally established.)

Posted by: Neil B ◄ on March 8, 2009 at 7:40 PM | PERMALINK

Didn't Hoover's tax increases turn the 1929 financial panic into the Great Depression? If they did, wouldn't it be a good idea to get the top tax rate down to the 1928 level now in order to avoid a repeat?

Posted by: MatthewRMarler on March 8, 2009 at 9:38 PM | PERMALINK

I'm sure, from reading the comments, that none of you are old enough, or were adults with decent incomes at the time, to remember that the high tax rates were not paid by the tax payers. They spent a lot of time and effort avoiding taxes. In the 1930s, there was a capital strike and lots of people just lived off bonds and other fixed income securities if they still had them. The graphic you should have had was tax revenue as a share of GDP over the years. Tax rates mean nothing if people don't pay them. Those with incomes close to the point where additional income will place them in a higher bracket will simply cut back. You also omit the effect of Obama's proposed limits on deductions, the lifting of the cap on FICA, which was there to avoid the impression that Social Security was a welfare program, and state taxes. The final effect will be much higher marginal rates with real effects on the economy. The left always seems to think that high income people will keep working at maximum output just to pay taxes. If you were in the high income group, you would know this is a myth.

I know you are immune to any input from outside the bubble but the tax revolt rallies should attract your attention. There were thousands of people at the rally in Fullerton and, unlike David Axelrod's Astroturf efforts, these are spontaneous.

Posted by: Mike K on March 8, 2009 at 9:50 PM | PERMALINK

Didn't Hoover's tax increases turn the 1929 financial panic into the Great Depression?

No, you fuckwit.

The country had been in a depression for four years, as had the world, before Hoover enacted his tax increases. By 1932 Sweden had already climbed out of the worldwide depression through deficit spending, middle class tax cuts, public works programs, providing national health care, and vast spending on social programs.

Are you really that fucking ignorant of history? If you are, perhaps you should be taking remedial history classes and posting on a kiddie blog somewhere rather than posting here.

Posted by: trex on March 8, 2009 at 9:55 PM | PERMALINK

Mike,

"Those with incomes close to the point where additional income will place them in a higher bracket will simply cut back."

It's never happened.

To the contrary, after President Clinton pushed federal income tax rate increases on both the Rich and the Corporate through Congress, federal income tax receipts soared to record historic HIGHS.

Posted by: Joe Friday on March 8, 2009 at 9:58 PM | PERMALINK

The left always seems to think that high income people will keep working at maximum output just to pay taxes. If you were in the high income group, you would know this is a myth.

So none of the leftist posters here are in a high income group?

Of course this isn't true, and how you have read this comments section for years and make a claim like that is perplexing, unless your ideological blinders allow you to believe that only "conservatives" make money.

I wonder what ever happened to the much-maligned figure of the limousine liberal? Consigned to the dustbin of inconvenient tropes, I guess.

Posted by: trex on March 8, 2009 at 10:06 PM | PERMALINK

He's proposing to increase spending by three trillion dollars. If the money isn't raised through taxes, then it will have to be borrowed, or created out of thin air. Either way, the economy will suffer for it. People think that as long as their taxes are low, and the government keeps providing the benies, everything is groovy. We're reaching the end for that mentality. The only way out is to reduce government spending, and we do not have politicians in either party with the guts to propose such a thing. The economy is going to stay in the tank for a long time.

These accusations flying between conservatives and leftists are amusing displays of hypocrisy for those of us with dark sense of humor. It is especially amusing to see conservatives trading in their Bibles for Atlas Shrugged, but I'm afraid it's a bit late for that now.


Posted by: Ardsgaine on March 9, 2009 at 12:50 AM | PERMALINK

The top line rate means nothing. Back in the 60's I had to submit pages of documents itemizing sales, property, excise tax, interest paid, fees etc. etc., all of which was deductible from your gross income. The net effect was that the effective tax rate, gross income less deductions, the amount you actually paid tax on, was about the same as it is currently.

Posted by: Ken on March 9, 2009 at 1:24 AM | PERMALINK

Seems from this that the top tier should maybe be put back at 60%.

And maybe Obama should have proposed this so that the incredibly rich don't bitch about 39%, which, historically, is not that much.

Posted by: Clem on March 9, 2009 at 5:25 AM | PERMALINK
I think the rich complaining that they're going to choose to be slightly less rich isn't going to help their cause. Anyone who is complaining about having to pay 4% more on any income over $250k and is threatening to make less-- to punish who exactly?-- is not going to get anything but anger from the American public.

40% of whom pay no federal taxes, and thus whose chief complaint is that other people aren't paying more of the burden that they should be helping to shoulder. Equality demands that even if it's just $1, every adult who works should have to fork over some cash for the common good--cash that will go into treasury and not come back to them in the form of a hand out.

Posted by: Mike T on March 9, 2009 at 2:37 PM | PERMALINK

40% of whom pay no income tax*

Posted by: Mike T on March 9, 2009 at 2:38 PM | PERMALINK

I'm with Ardsgaine on this. The rabid, and I do mean rabid, defense of each sides case conveniently overlooks the other sides other salient points. Maybe raising taxes on the wealthy is a good thing. Unfortunately, most of the posters to this thread are overlooking how good it would be also reduce spending. Here are some generalities for you:

Rightists always want to reduce taxes while reducing government spending.

Leftists always want to raise taxes while increasing government spending.

In our current state both ideologies suck. Fine, raise taxes on the "rich" but why can't we also dramatically cut spending?

You all get so deluded by the propaganda spewed by both the Reps and the Dems. And if you don't think this chart is propaganda you're still deluding yourself!

Posted by: Scott on March 9, 2009 at 2:38 PM | PERMALINK

This article would be useful if the person that did the research took into account all of the governmental created "fees", "charges", "surs", and other non-tax-named grabs for the citizens' money in the chart. If a person is only to compare federal income tax between countries and even between presidents (eras), then one misses the boat. That's not the only tax paid, it's just that the other taxes aren't called "income" taxes. However, since everything we consume has to come from our "income", there are obviously more "income" taxes than just the federal income tax.

I fit in the middle class spectrum, and quite frankly, I believe government has over-taxed everyone from top to bottom. When I say taxed, I mean with every regulatory oppressing tax, fee, charge, surs, etc.

It's time government, on all levels, learn to do more with less, rather than grab more and do less.

Posted by: Mike on March 9, 2009 at 2:56 PM | PERMALINK

What's being missed here is that $250K isn't rich. What's also missing is that the salaried workers I know are working between 10-15 hours a day. I think you see the reaction is that upper income people don't use many of the public services that lower-income people do. In addition, it doesn't occur to many of the lower-income people I know that they can rely on THEMSELVES to improve their lot in life.

If you read Atlas Shrugged, you'd understand the point of Galt's Gultch. It was that the drivers of the world can do all the hard labor jobs just as effectively as anyone else. The difference is that they can do them as a step in the process to build something better. I get the sense that many of today's "worker class" don't have the drive to improve their lot and believe that they're owed something. They can only survine when "given" a job. The "rich" CREATE THEIR OWN and then create them for others in order to MAKE PROFIT. They can and should be selfish.

Adult life isn't a couple of four year-olds on the playground. There are winners and losers. Better to be a winner in the driver's seat than a loser in a breadline.

Posted by: Ragnar on March 9, 2009 at 3:04 PM | PERMALINK

How convenient they started at 1920. the rates in 193-1915 were 7%, then 15% in 1916.

Also in the past the highest tax bracket required a LOT LOT LOT more income than today(adjusting for inflation in some cases). Nowadays you don't have to be anywhere close to rich to be in the highest bracket. In fact, a lot of families earning $500,000 a year can't afford to live anywhere special yet pay the same rate on half their income as families making $50 million a year pay...

Check out this table:
http://www.ntu.org/main/page.php?PageID=19

Posted by: John Munsey on March 9, 2009 at 3:19 PM | PERMALINK

Tyrannogenius,

Please post pictures or a graph to explain. I want to print it out to show people who show me the graph above.

Thanks.

Posted by: TagneyDaggart on March 9, 2009 at 4:17 PM | PERMALINK

Here is an article that demonstrates that high top tax rates result in economic growth and prosperity. In a nutshell when the top tax rates are high to avoid paying the tax the wealthiest leave the money in the companies which leaves the companies adequately capitalized resulting in growth. Low top tax rates results in the wealthy taking the money out of the companies to gamble in such adventures as OTC derivatives. High top tax rates don't increase tax revenues but they due persuade profits to be plowed back into the real economy. http://www.alternet.org/workplace/106979/why_the_economy_grows_like_crazy_amid_high_taxes?page=entire

Posted by: Chuck on March 9, 2009 at 6:24 PM | PERMALINK




 

 

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