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As late as 1963, the top marginal tax rate was 90%.
Strangely, we were still able to maintain a growing economy, one of the highest standards of living in the world and a sizable military force, befitting our status as a world superpower.
Oh, yes, and we were in the midst of building the Interstate Highway System. These days, we don't even seem to be able to maintain it properly, so good thing we built it with those sky-high tax rates.
I did some research on marginal tax rates several months back. I dont have my tabulation handy, but if I recall correctly, that highest marginal rate was 97% and I dont recall how many brackets there were. Kennedy lowered the highest marginal rate to something like 70% and then Reagan lowered it to 50% effective 1982 IIRC. Bush lowered the highest marginal rate to 36% and cut the number of brackets to three.
Obama wanted to raise the highest marginal rate to 39% and oh how those conservatives whined!
My question has been the same as your. If the prosperity of the 50's could happen with a maximum marginal rate of 97%, why all the whining about how business will be harmed if it goes from 36% to 39%?
One thing that happens with high marginal rates is that business owners are more likely to keep money in their businesses rather than withdraw it as salary and/or bonus. As rates decline, owners will take out more for themselves and leave less in the business. Proof of this may be inferred from the following:
In 1980, the average compensation of the highest paid person in the company earned a factor of 40 over the compensation of the lowest paid person. Today that ratio is more like 200 to one.
It may be that the study I recall talked of Fortune 500 CEO's. I'll have to look that up. But the point is that there is a direct relationship between marginal tax rates and business owner compensation - high marginal rates, lower the ratio, and visa versa (negative correlation).
I did some research on marginal tax rates several months back. I dont have my tabulation handy, but if I recall correctly, that highest marginal rate was 97% and I dont recall how many brackets there were. Kennedy lowered the highest marginal rate to something like 70% and then Reagan lowered it to 50% effective 1982 IIRC. Bush lowered the highest marginal rate to 36% and cut the number of brackets to three.
No, you really didn't do ANY research. Because if you had, those tax rates were implemented to SLOW THE ECONOMY. Yes, they were specifically created to smack the economy down, to slow economic activity.
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Obama wanted to raise the highest marginal rate to 39% and oh how those conservatives whined!
What possible benefit would it be?
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My question has been the same as your. If the prosperity of the 50's could happen with a maximum marginal rate of 97%, why all the whining about how business will be harmed if it goes from 36% to 39%?
Your question is irrelevant. IF all the conditions of the 50's were the same, with the ONLY difference being marginal tax rates, then you may have some point. But, nothing is the same, and the effective tax rates, due the extremely convoluted tax code filled with breaks, write-offs, and shelters were actually far less than today.
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One thing that happens with high marginal rates is that business owners are more likely to keep money in their businesses rather than withdraw it as salary and/or bonus. As rates decline, owners will take out more for themselves and leave less in the business. Proof of this may be inferred from the following:
This is pure hogwash. Start your own small business and risk everything you have to get it off the ground, then return and tell me about the virtues of taxing your business.
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In 1980, the average compensation of the highest paid person in the company earned a factor of 40 over the compensation of the lowest paid person. Today that ratio is more like 200 to one.
Irrelevant, in all aspects, to all matters and in all ways.
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It may be that the study I recall talked of Fortune 500 CEO's. I'll have to look that up. But the point is that there is a direct relationship between marginal tax rates and business owner compensation - high marginal rates, lower the ratio, and visa versa (negative correlation).
You conflate pointless and meaningless trivial numbers with reality.
As late as 1963, the top marginal tax rate was 90%.
Strangely, we were still able to maintain a growing economy, one of the highest standards of living in the world and a sizable military force, befitting our status as a world superpower.
Oh, yes, and we were in the midst of building the Interstate Highway System. These days, we don't even seem to be able to maintain it properly, so good thing we built it with those sky-high tax rates.
No one was actually paying 90% of their income for taxes.
If the prosperity of the 50's could happen with a maximum marginal rate of 97%, why all the whining about how business will be harmed if it goes from 36% to 39%?
Because most of those rich guys with the 90+ percent tax rates actually paid no taxes at all. Loopholes were specifically designed for them by lawmakers.
They eliminated some of the loopholes when they lowered the rates.
You don't think FDR was really taxing others of his class at that rate do you?
Social mobility
Education
Unemployment
Quality of life
Economy
Crime
Wealth
Etc.
I can certainly make arguments that is not the case for many of those things and trying to correlate that with tax rates becomes problematic.Goverment spending is factor but it's not the only factor and probably not the major factor for many of them. For example you mention education but the US is one of the top spenders if not the top spender in education, how does that fit in?
The United States spent more than $11,000 per elementary student in 2010 and more than $12,000 per high school student. When researchers factored in the cost for programs after high school education such as college or vocational training, the United States spent $15,171 on each young person in the system — more than any other nation covered in the report.
That sum inched past some developed countries and far surpassed others. Switzerland's total spending per student was $14,922 while Mexico averaged $2,993 in 2010. The average OECD nation spent $9,313 per young person.
Because some of us don't believe in a welfare state where some work so others can mooch. Some of us believe that those who work should....gasp...actually be rewarded for working instead of penalized by taking away what they earned.
And as my mother used to say "If everyone jumped off a cliff, would you?". I don't care what taxes are in other countries. That's their business. I care what portion of my income I get to keep and it's not enough. That they pay more is their problem to deal with. My fight is keeping enough of my income so I can live off of it without government hand outs.
Is that chart considering ALL taxes, or just income tax rates?
If it is not showing ALL taxes, why not?
What about the "hidden taxes" that most people aren't even aware they are paying? There is a hidden tax on a loaf of bread! A long time ago, I had a list of all the hidden taxes we pay every day, but I lost it long ago. This will give you some idea: Hidden tax - Wikipedia, the free encyclopedia
Is that chart considering ALL taxes, or just income tax rates?
If it is not showing ALL taxes, why not?
What about the "hidden taxes" that most people aren't even aware they are paying? There is a hidden tax on a loaf of bread! A long time ago, I had a list of all the hidden taxes we pay every day, but I lost it long ago. This will give you some idea: Hidden tax - Wikipedia, the free encyclopedia
I don't really have a way to break up hidden taxes by consumption level or income level. However, here are the tax rates compared to GDP and even using that as a metric we are a low tax country.
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