Posted on 09/29/2020 11:57:29 AM PDT by karpov
Liberals hope Joe Biden will be another FDR. But that’s something to fear, as Mr. Biden’s tax proposals threaten to repeat Franklin D. Roosevelt’s big mistake, which many historians blame for plunging a recovering economy back into depression.
Roosevelt proposed a wealth tax in 1935, expanded it in 1936, and gave it real teeth in 1937. The federal government needed to repel the attack on the foundations of society by “economic royalists,” he argued. John Nance Garner, his vice president, agreed. As a congressman Garner had been forthright. “We have got to confiscate wealth,” he declared in 1918.
By 1936 the top U.S. personal income-tax rate had been raised to 79%, with a 70% maximum estate tax. The top federal corporate tax rate, however, was only 15%. In response, wealthy Americans accumulated profits inside corporations that owned their residences and other assets. Hollywood actors had their compensation paid to corporations they owned and from which they borrowed heavily.
Suddenly, at Roosevelt’s urging, Congress tore up all this careful and legal tax-avoidance planning with the Revenue Act of 1937. Corporate money was subject to immediate distribution and taxed at high individual rates. In effect, these were accumulated-wealth taxes, imposed at precisely the wrong time. The year also saw the introduction of a 1% Social Security tax on the first $3,000 of wages.
The economic pain was swift and severe. The Dow Jones Industrial Average crashed to 114 on Nov. 24, 1937, from 190 on Aug. 14, a 40% decline. Gross domestic product fell by more than 5% between 1937 and 1938. Unemployment, roughly 12% in May 1937, climbed to 20.7% in April 1939. Industrial production tumbled 33% from the spring of 1937 to May 1938 and didn’t return to its 1937 peak until late 1939.
(Excerpt) Read more at wsj.com ...
Biden’s blunder will be FDR at warp speed and beyond.
Great point, I think their stock market peaked in 1989 here it is 30 years later and still no new high.
#15 You describe the democrat “Plandemic”
Oppressed the small businesses with unbelievable rules and regulations to control economic output.
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