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Not really. Reagan in effect confirmed the notion that nobody paid that 91% rate. When faced with 91% taxation, people changed their behavior to avoid it. In reality, it was as if the 91% rate did not even exist.
So when Reagan said "Why make another picture that year if you kept only 9 cents on the dollar?" he was confirming that he, Reagan, didn't believe that people were being taxed at the 91% rate? Seems to me he was indicating that he did believe people in that tax bracket would only get to keep 9% of their earnings.
So when Reagan said "Why make another picture that year if you kept only 9 cents on the dollar?" he was confirming that he, Reagan, didn't believe that people were being taxed at the 91% rate? Seems to me he was indicating that he did believe people in that tax bracket would only get to keep 9% of their earnings.
Yes, if they made the extra picture. But they didn't.
Not really. Reagan in effect confirmed the notion that nobody paid that 91% rate. When faced with 91% taxation, people changed their behavior to avoid it. In reality, it was as if the 91% rate did not even exist.
Sure it had an impact, it changed people's behavior. That was the purpose. Duh
Sure it had an impact, it changed people's behavior. That was the purpose. Duh
The purpose was to get people to stop working and instead hang around the Brown Derby restaurant? 'Duh' is quite right. Or maybe even better, Homer Simpson's "D'oh."
As I look up your claim, I see repeatedly a tax rate of 92% for those making more than $400k under Eisnehower, it stemmed from Truman. Otherwise I see no evidence to support the premise.
That's entirely subjective. To me 24% and 31% are in the same ballpark. If I'm told that a tax rate that I pay is going from 24 to 31, I won't be happy about it, but I probably won't revamp my entire life over it. OTOH if a rate goes from 36% to 91% I most certainly will revamp in order to avoid the 91% grab.
The number from 2010 was 29.4% according to the CBO I doubt that any would deny that 29% is in the same ballpark, probably even in the same infield, as 31%. The number for 2014 will probably be even higher due to the 'fiscal cliff' deal that put the top nominal rate back to 39% (from 36%).
That's because we all think of tax rates in nominal terms. A 7% nominal increase is not life altering.
A 7% effective increase _is_ life altering. That's enough to permanently wipe out your retirement savings and very investment you have.
The 29.4% is an apples to oranges rate. The 31% was effective federal income tax rate while the 29.4% is effective all federal taxes rate. The huge difference is that effective "all taxes" rate include 75% of all corporate taxes according to shares of capital. (The other 25% is accorded to the corporations workers.)
Or to examine that a different rate, the effective all taxes rate in 2004 was above 32% while the effective income tax rate was 24%.
That's because we all think of tax rates in nominal terms. A 7% nominal increase is not life altering.
A 7% effective increase _is_ life altering. That's enough to permanently wipe out your retirement savings and very investment you have.
The 29.4% is an apples to oranges rate. The 31% was effective federal income tax rate while the 29.4% is effective all federal taxes rate. The huge difference is that effective "all taxes" rate include 75% of all corporate taxes according to shares of capital. (The other 25% is accorded to the corporations workers.)
Or to examine that a different rate, the effective all taxes rate in 2004 was above 32% while the effective income tax rate was 24%.
OK you are right--I looked again at the link, and the 29.4% CBO number includes all federal taxes, so I was mistaken. Still just going back to the Piketty numbers, the 1% paid 31% effective rate in 1960, and 24% in 2004. I don't have a number for after 2011, but presumably it would have gone up from 24% due to the higher top rate.
The myth marches on however. I noticed it came up just today in another thread here:
Actually what I find interesting is that the left only talks about income tax, but the rich are not getting rich by having a high income. They are getting rich by capital gains.
So what would a 91% tax rate achieve today? Apart from damaging the economy, it would just lead to even more people earning money on capital gains.
An interesting statement. You can argue that the current talking point (it was so sudden, and so overwhelming, that I can't help but think of it as that...sort of like the Koch brothers deal) hullaballoo of the 90+% rates may well be a policy point pushed as much by the very wealthy as by the various special interest groups.
By raising money from the upper middle class and the wage-based upper classes, you are saving the bacon of the truly rich.
Personally, I'd simply make a few changes and see what happened.
. Stop the double taxation of dividends
. Tax capital gains at income rates, but, throw a table in the tax code which allows you to inflation-correct the gains. It's silly, and a bit unfair, to charge taxes on profits which were purely the result of inflation.
. Get rid of the home interest rate deduction
The more the government spends of GDP the less invested by private and the less risk they are willing to take in investments. Its the road to Greece. Everything has consequences. just as increase numbers of dependent on government does for welfare by wealth sharing.
The more the government spends of GDP the less invested by private and the less risk they are willing to take in investments. Its the road to Greece. Everything has consequences. just as increase numbers of dependent on government does for welfare by wealth sharing.
Actually the primary cause of failure of greece was tax evasion. Greeces benefits and spending were about average for the EU. Their tax collection rate was sub par to say the least.
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