If folks are looking for less ancient examples of very high top marginal tax rates, one need only go back to 1963, when Donald Trump was 17 years old and America was (presumably) great the way it should be again, when the top marginal tax rate was 91%. Not a typo. taxpolicycenter.org/statistics/h... - ThreadSky

sethcotlar.bsky.social • 92 days ago

If folks are looking for less ancient examples of very high top marginal tax rates, one need only go back to 1963, when Donald Trump was 17 years old and America was (presumably) great the way it should be again, when the top marginal tax rate was 91%. Not a typo. https://taxpolicycenter.org/statistics/historical-highest-marginal-income-tax-rates

Comments

autumnwoods25.bsky.social•92 days ago

Look at the post-war boom rates!

chickent.bsky.social•92 days ago

I am sure one of those Roman Empire guys can come in and clarify/correct me; but didn’t they have a tax system that the richest X number of people paid taxes, no one else did - but it was also a huge flex and honor to be one of the ones who paid?

h2sdrummer.bsky.social•92 days ago

Just as importantly the current top rate is lower than almost the entirety of the last 100 years minus part of Reagan’s tenure and part of Bush/Obama. Like how about we just go back to 39% and also actual crack down on tax evasion by wealthy non-filers.

bbones47.bsky.social•92 days ago

We were doing fine in 1996 at 39.6%. It’s low Capital Gains and Corporate rates that is killing us and creating oligarchs like Musk

johnkaprielian.bsky.social•92 days ago

Precisely!

silkysylluvan8.bsky.social•92 days ago

Figures don’t lie, but the GOP will lie about them.

unhipcat.bsky.social•92 days ago

everyone PLEASE keep in mind, numbers are NOT tax on total income, but tax on income over previous amount.
e.g., additional $20,000 taxable income resulted in $600 more in taxes. ($20k x .03)
1960 75.0% > $100,000
1960 78.0% > $120,000
hardly a 78% rate

https://taxfoundation.org/data/all/federal/historical-income-tax-rates-brackets/

saltydjinn.bsky.social•92 days ago

I'd be pleased as punch to go back to 1986. We're at 37%?!? Wtf

leftcoastzen.bsky.social•92 days ago

I'm good with 70%

bbaz2024.bsky.social•92 days ago

And the unions were strong. The middle class had money to drive the economic engine in America.

tbas7000.bsky.social•92 days ago

What a coincidence! Those were the years we had least great disparities of wealth and the lowest income inequality.

(Also, highest union membership.)

annaconda1.bsky.social•92 days ago

And NASA had real coin

sethcotlar.bsky.social•92 days ago

Even if we compromised and said "ok, 91% is a bit much for a top tax rate, what if we went for the lower rate that applied from 1964 to 1980 when Trump was in his 20s and early 30s," that would be >70%, almost TWICE the current rate of 37%.

sethcotlar.bsky.social•92 days ago

"In 1980, 11 percent of national income was received by the top 1 percent in the US, compared with 21 percent received by the bottom 50 percent. In 2016, 20 percent of national income was received by the top 1 percent in the US, compared with 13 percent received by the bottom 50."

silkysylluvan8.bsky.social•92 days ago

How to destabilize a country: cede it to the plutocrats.

sethcotlar.bsky.social•92 days ago

Meanwhile, the rate that the top 1% was paying on that rapidly increasing share of income dropped precipitously. And then we wonder why spending on public goods has shriveled while the national debt increases.

jmwallach.bsky.social•92 days ago

Almost like everything comes back to fucking Reagan.

katiecannon.bsky.social•92 days ago

Honestly, that was back when folks understood the state creates the legal unit of account: The dollar, the pound, the yen - or whatever

Taxes regulate the value of the currency & protect democracy

davetait.bsky.social•92 days ago

A simple way for the very rich to avoid punitive tax rates is to not drain as much wealth out of enterprises that produce it. Taxes allow it to be spread through society more broadly, but the other option is to use that wealth to better wages and benefits, increase R&D, and improve product quality.

davetait.bsky.social•92 days ago

Paine's principle is that there is such a thing as "enough." For far too long now, the rule instead has been "as much as you can get for the least possible in return" -- and that's confused with market principles.

aliagvr.bsky.social•92 days ago

From my side (England), we saw so many here leave to the US in the 1970s when the top tax rate hit 75%. Rod Stewart, Elton John et al, they all raced over.

What they never understood: the top tax rate on a top tier balanced the economy to what they envisioned as 50s & 60s USA.

katiecannon.bsky.social•92 days ago

The amount of adulation we give stars really needs to be rethought

joekatz45.bsky.social•92 days ago

Weird how so many of our current national challenges got way worse in the 1980s

anoosh100.bsky.social•92 days ago

::whips out of my back pocket::

kmcm.bsky.social•92 days ago

📌

sannl04.bsky.social•92 days ago

When I moved to DC in the mid 80s, as a fresh college grad, many large corporations were moving their head quarters to metro DC, and lobbying firms were exploding. Years later, I read that around 1980, a particular lobbying firm upended the industry. 2 principles were Roger Stone and Paul Manafort.

bugdrown.bsky.social•92 days ago

Am I wrong, or does this chart show what the right calls a redistribution of wealth?

skimpole.bsky.social•92 days ago

I remember reading Studs Terkel in the 1980s, high school, and how concerned he was by the drastic growth in the wealth gap

davesnothere24.bsky.social•92 days ago

This article gives a few of Thomas Paines quotes on why he supported a progressive tax system and estate taxes.
https://www.tompainetoday.com/commonsense/2021/03/20/in-1792-thomas-paine-proposed-a-100-tax-on-wealth-over-5-million-in-todays-dollars/

davesnothere24.bsky.social•92 days ago

But the chief object of this progressive tax (besides the justice of rendering taxes more equal than they are) is, as already stated, to extirpate the overgrown influence arising from the unnatural law of primogeniture, and which is one of the principal sources of corruption at elections. -Tom Paine

jjkettlewell.com•92 days ago

And, what do they actually pay after all the loopholes? Us ordinary folks actually pay our taxes.

davesnothere24.bsky.social•92 days ago

Propublica data shows that the ultra wealthy pay as little as nothing. https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax

pjro.bsky.social•92 days ago

Econometrics has shown that a top rate of about 70 percent has been optimal for economic growth in the US. Probably this is high enough to discourage business owners from extracting receipts for their immediate gratification yet low enough not to discourage business growth/improvement.

the-dudemeister.bsky.social•67 days ago

Is the picture enough of an explanation as to when we quit taxing the wealthy appropriately, then the nation and People suffer.

heliocfelix.bsky.social•92 days ago

📌

castlerock99.bsky.social•92 days ago

In just 8 yrs, rates went down from 70% in 1980, to 28% in 1988. Who was in charge during that time? No wonder why the republicans idolize Reagan.

poofer.bsky.social•92 days ago

Yeah he was in the pockets of the rich.

deveryty.bsky.social•92 days ago

Just ruminating on the good ol' days, Maga & Trump want America to get back to, yet they never want to revert to the tax rates of the time. From 1944 to 1963, the top tax rate was 91% for individuals. Hell, the top tax rate was 70% up until 1980. Reason No. 7,234 on why billionaires shouldn't exist.

roddusi.bsky.social•92 days ago

If only that sh*t had trickled down . . .

deveryty.bsky.social•92 days ago

From 1981 to now, wealth hasn't trickled. It's fire hosed from the working & middle classes to the top 1% in wealth. In a decade, there will be no "middle" if we continue to elect politicians who reigned over the largest wealth transfer in history. Billionaires should not exist.

roddusi.bsky.social•92 days ago

Yes, precisely the point of my comment. Every time someone complains about some federal program (food and housing support, childcare programs, etc.) to deal with the gaps among the working poor, that’s my go to line.

roddusi.bsky.social•92 days ago

They are not really programs to help the working poor, they are aid to corporate America to allow them to continue paying less than a living wage.

mdgarfinkel.bsky.social•92 days ago

Three other significant differences: ratio of CEO pay to median worker pay was much lower; CEOs being paid cash rather than principally stock options; corporations were barred from buying back their own stock.

When did things change? When Reagan's "industrial policy" emphasized the "FIRE" sectors.

180riverside.bsky.social•92 days ago

But how many people actually paid anything at those rates? I believe that even back then the high earners had figured out all sorts of ways to avoid big tax bills.

roddusi.bsky.social•92 days ago

Yes there were loop holes and tax breaks, but the idea behind this more aggressive marginal tax policy pre-Reagan was that there was less incentive to horde wealth and more incentive to invest in productivity. It was part of the social contract of capitalism with minimal government intervention.

peterjwagner3.bsky.social•92 days ago

One of the problems is that people didn’t understand progressive/graduated taxes. Back in the ‘70s, a lot of people truly believed that you paid that rate on *all* of your income: and thus a raise could make you poorer sometimes. (They might have done so earlier: but I was too young to be aware!)

woodardj.bsky.social•92 days ago

Anti-tax folks still go out of their way to deliberately give this misconception about marginal tax rates. This was literally the “Joe The Plumber” line of attack of the McCain/Palin campaign.

peterjwagner3.bsky.social•92 days ago

I think that a lot of them genuinely do not get it. They do not think to look at tax tables and work out what % of your income you actually are paying. Indeed, they don’t connect that the reason we need tax tables is because of graduated rates: otherwise, we’d just use the rate ✖️ taxable income.

woodardj.bsky.social•92 days ago

That’s certainly the generous interpretation, and I’m sure there are a lot of folks in that bucket, but I also think there’s a large category of pundits who DO understand it, but are happy to keep the first group uninformed. Ugh. Frustrating state of affairs 😠

peterjwagner3.bsky.social•92 days ago

Oh, they definitely understand it. That said, supposedly much of what drove Reagan's anti-tax rage is that he genuinely did not get that he was not paying those very high rates on all of his income. Supposedly he was much like Trump on tariffs where progressive taxes are concerned.

peterjwagner3.bsky.social•92 days ago

And that's what created this mess in which we reside. It's forgotten now, but the "villain" in Coupland's Generation X novel was Reaganomics: the unifying trait of his concept of the generation (which is older than the current concept) was that they got out of college right in time for the huge…

h2sdrummer.bsky.social•92 days ago

The caveat being that any prep software either the payer or their accountant uses tells you your effective rate.

woodardj.bsky.social•92 days ago

Fair, but that’s usually a bit of a footnote, and doesn’t dive into “you paid 23¢ on THESE dollars and 37¢ on THOSE dollars.

h2sdrummer.bsky.social•92 days ago

On TurboTax it is not a footnote. On professional software it’s in the client letter that’s generated that you send to the client. 100% correct it still doesn’t help with willful ignorance of marginal rates.

peterjwagner3.bsky.social•92 days ago

True: but in the defense of my friends' misinformed parents, the only "software" available was one of those new-fangled calculator thingies: and those were so hard for our parents to use!!!* (We had our own version of "Boomer" jokes then, although we didn't use those terms...)

peterjwagner3.bsky.social•92 days ago

*: My father was not among them. Whatever other flaws he had, he "got" computers immediately, and he reflexively assumed that everyone else would be wise enough to use a calculator to recognize that taxable incomes in the 33% tax bracket were paying <33% overall.

muckingwithmary.bsky.social•92 days ago

This actually happened to a coworker at a Dennys restaurant back in about 1975? One of our Cooks got an hourly raise, was very excited to get that first paycheck with the added amount, and his net pay was a couple dollars less.

peterjwagner3.bsky.social•92 days ago

How much employers withhold and how much is taxed are two different things. That's why some people get refunds and others do not on the same income: the former group had more $$$ "paid in advance." Ultimately, your coworker would have had to play less (or have gotten a bigger refund) come tax time.

peterjwagner3.bsky.social•92 days ago

(There are rules concerning "downpayment" of taxes for both employees and employers, and those rules have changed a lot through the years: I was 11 at the end of 1975, so I have no idea what they were like then; however, Denny's probably thought it "safest" on their end to pay more in advance.)

wencen.bsky.social•92 days ago

And should be 100 % for anything over 999 million!

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