Posted on 01/19/2019 5:35:11 AM PST by reaganaut1
It wasn’t that long ago, in 1980, that America had a top income-tax rate of 70% for individuals, nearly double the current top rate of 37%.
And it wasn’t unusual. From 1940 through 1980 the top rate for the highest earners never dipped below 70%. During most of the 1950s, when the U.S. economy dominated the world, the top rate was 91%. It kicked in at $400,000 of taxable income, or roughly $3.7 million in today’s dollars.
This history is relevant given New York Rep. Alexandria Ocasio-Cortez’s recent call for higher tax rates on what she called the “tippy-tops” to raise more revenue. She suggested that a top rate of 70% could take effect at the $10 millionth dollar of income.
But make no mistake: Many top earners during the high-rate era, such as politicians Dwight Eisenhower and Ronald Reagan, entertainer Jack Benny and librettist Alan Jay Lerner, didn’t pay the top rates. In 1952, for example, when the top rate was 92%, the highest-earning 1% of taxpayers had an average rate of 32%, according to Elliot Brownlee, a tax historian and emeritus professor at the University of California, Santa Barbara.
“When top tax rates were high, there was always a large gap between the stated rates and what the highest earners actually paid as a percentage of their income,” says Joel Slemrod, an economics professor at the University of Michigan.
Of course, a filer’s average tax rate is lower than his top rate because the U.S. system is progressive, taxing higher income at higher rates. Still, the income tax due on $1 million of wages in 1952 would have been about $870,000, according to Jay Starkman, a certified public accountant in Atlanta who researches tax history.
(Excerpt) Read more at wsj.com ...
A balanced budget amendment would give them the green light to raise taxes to “how much did you make last year? Send it in” levels.
Then you get the sanctimonious super-rich liberals who complain that they don't pay enough in income taxes while at the same time paying millions to tax accountants and tax attorneys to find every possible loophole to avoid income taxes.
You made my point. Money especially government fiat money has never been a reliable store of value yet here it is still with us.
See, here’s the problem.
Both of your suggestions make very good, practical sense.
Both are worth trying.
But neither will ever be tried.
Why?
[pessimism]
Because our political system is so screwed up that vested interests would block any attempt to propose them, vote on them, or implement them.
[/pessimism]
Armed Robber confronting Jack: "Your money or your life!
(A moment's hesitation) "Come on, come on..."
Jack: "I'm thinking, I'm thinking!"
Yeah... I just heard there's a guy down on the corner selling dimes for a nickel… :)
Vested interests = donors.
So, require ALL POLITICAL DONATIONS TO BE ANONYMOUS. Can't sell influence if you don't know who is buying.
Excellent point!
A lot of the boat builders were jealous of the rich yacht owners and were all for the tax soaking the bigshots.
Once the tax went through, the bottom dropped out of the industry and many companies went out of business or were forced to scale back radically which put all the jealous boat people were out of work and out of luck.
Fast forward 5 years and many had not had a steady job since the tax passed .
There was rejoicing when the tax was repealed and the industry started to slowly recover.
People started to go back to work and you would think they should have learned their lesson of basic economics, but they didn't .
They were just as jealous and resentful of the rich yacht guys as before.
Guess you simply can't change human nature and jealousy and covetousness can be two of the most destructive aspects of human nature.
“There are still plenty of loopholes in the US tax code so that if AOC gets her 70% rate or, heaven forbid, Castro gets his 90% rate, that the wealthy will do what they have always done.”
The limousine liberals will simply shift their wealth to tax free foundations, just like the Kennedy’s, Bill Gates and the Clintons did. All other high income earners must pay up.
Here’s what I’d do:
1. Eliminate all deductions. ALL.
2. Eliminate Corporate tax.
3. Eliminate death taxes.
4. Leave the tax rate for capital gains as is.
5. Exempt whatever amount we determine is up to the poverty line. So say, $20,000 per year is exempt (or some such amount). Now nobody can say we’re crushing the poor. They pay no tax at all until at least reaching the poverty line.
6. tax all regular income above that at a standard flat rate. No fancy tax lawyers or accountants. No economically inefficient tax shelters. Very little time or money spent on compliance costs.
We’d raise at least as much money, the economic distortions caused by tax avoidance strategies would be gone, people getting out of paying hardly anything thanks to having slick tax lawyers and accountants would be gone. We could slash the IRS’s payroll too.
Article says it was easy to convert income into capital gains taxed at 25% - and thereby Benny saved about $800,000 on one $2 million deal.
All they have to do is put a Voluntary Tax Table with the 70% figure on the Tax Form for all the guilty Rich Liberals.
I know they tried it in MA. John F’n Kerry’s Accountants made sure he paid the lower Tax Rate of 5%, not the higher 7% voluntary Tax Rate.
When the personal rates were 70-90% back in Jack Benny’s day, most of the highly-paid performers used what was known as “loan-out corporations” which were basically personal holding companies (which technically were highly taxed in of themselves). The revenue earned by the performers was contractually the recipient of the performers’ from the revenue source, and the performer only withdrew what cash was needed to live on.
Montana is beautiful.
But not beautiful enough to endure the winters!
Nice summer place for snowbirds though.
Very interesting...
Hmmm. Not bad, not bad at all!
At some point the voters get the government they deserve!!!
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