When talking "trickle down" why don't people bring this up?

[Liberal Veteran]

From 1945-1965, commonly know as American's Golden era and the era of the middle class American, the top tax rate was between 94% and 91%?

Is there something I am missing here?

[rabid_nerd]

1. it was?

wow

[Liberal Veteran]

2. According to this, yes....

http://acct.tamu.edu/kinney/611course%5C611%20notes%5Cindividual%20income%20tax%20rates.htm

[WhoCountsTheVotes]

6. Yep, liberal economics created the middle class

Let's take our liberal economics along with our fiscal discipline and rebuild the middle class that's taken a beating under Bush.

[SaveABug]

3. I don't know that it was that high, but I really don't know the numbers

I think it was more in the 48 - 55 percent range, and even that may be high. I do know that we had great prosperity with a less than 40 but greater than 50% rate. Let the rich bastards play with their imaginary money and the social net is still secure.

[kysrsoze]

10. You're probably right - remember all the loopholes they used to have

so they were probably taxed around 90% on 10% of their true income. He he.

[sandnsea]

4. WWII

We had to pay for that and that's also why it was called the war economy. And the 50's had some inflation problems too, after Korea, so I've heard. I was just a baby. So there's some peculiarities in there that probably make the tax thing off just a bit, or at least need to be considered when looking at the idea of what taxes do to an economy.

[kodi]

9. least we forget the rest of the world lay in ruins?

and they were markets for american products, bought by funds provided by the marshall plan and other forms of aid used to counter insurgent communism.

[Clete]

5. I remember when the top rate was 91%

I forget what the minimum was that you had to earn to be there. I was doing payroll then. I thought it was a bit excessive and I asked the controller about it that. He replied that because there were so many tax loopholes, it was an idiot millionaire who ever paid that rate. Most paid about 25% to 30% in taxes he told me. There were also many ways to invest money then wherein the income was tax free, like municipal bonds.

[Liberal Veteran]

7. The minimum was 400k......

Butyou have to admit that it seemed to give them more incentive to actually sink that money into the economy one way or another (through investments, etc...) than the current system.

[unblock]

8. not that anybody actually PAID those rates

those high rates we balanced by a gazillion of tax shelters. a fair chunk of the gdp was completely unproductive activity, conducted solely or largely to avoid taxes.

now actually, this can be a very good thing if done properly. it amounts to using the tax code to provide incentives to direct economic activity. done properly, it can steer the economy in the right direction, e.g., by giving a big tax break to eco-friendly research and so on.

but the right has given this a bad name as 'picking winners and losers'. 'let the free market decide'. you know the drill.

so now we have much lower top rates and vastly fewer tax shelters.

AVERAGE tax rates (not the MARGINAL tax rates most people talk about, e.g., above) haven't really changed very much over the years for this reason. at least that's what they taught me in econ 102. having said that, shrub's cuts have certainly not been balanced with fewer shelters (in fact, more money can be sheltered now vs. when clinton was prez) so average tax rates surely have dropped in the last 2 years.