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1950s tax rates

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Mtn Dew posted on Wed, Oct 27 2010 11:14 AM

So the tax rates in the 1950s were very high, especially for the richest folks. Were there more deductions back then? If not, how come in 1955 federal spending was 14% of GDP whereas today it's over 25%? Even including all government in 1955 spending was only about 25% compared to today's rate of 44%. If tax rates were so high, how come spending as a percent of GFP was almost half?

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Printing presses.

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Mtn Dew replied on Wed, Oct 27 2010 12:11 PM

Not a good response, anyone else?

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Southern replied on Wed, Oct 27 2010 12:25 PM

I would think that debt has to be a major component.  The borrowing would allow the government to spend more without haveing as high of a tax rate.

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So we got a high tax rate, low deficit, but also lower spending vs. a lowered tax rate, high deficit and higher spending.

The question remains were there many deductions? With such a high rate at the top i would think growth would have been stunted even with Europe in ruins, but it really wasn't.

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I forgot :

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The graphs I made off the websites exclude state and local, so just federal

http://www.usgovernmentrevenue.com/

http://www.usgovernmentspending.com

Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid

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They weren't high, check the tax revenue. Secondly the government's operation is now funded by the selling of bonds.

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Take into consideration that the size of the economy has nearly doubled per capita (well, 1.5x or so).

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They weren't high, check the tax revenue.

Didn't FDR/Truman/Eisenhower have the top tax bracket at like 90%?

During the war he pushed for even higher income tax rates for individuals (reaching a marginal tax rate of 91%) and corporations and a cap on high salaries for executives. (From Wikipedia because I can't find an old graph where I got the information from originally.)

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Yes, FDR actually tried to tax the top bracket 100%, but that's beside the point.

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Yes, FDR actually tried to tax the top bracket 100%, but that's beside the point.

1. You said they weren't high. How is that beside the point?

2. Do you have any sources that he wanted to make it 100%? I would assume that it's true, but I like sources.

"Every normal man must be tempted at times to spit on his hands, hoist the black flag, and begin to slit throats." - H.L. Mencken.

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Taxes have little relation to spending % of GDP everywhere due to the ability to borrow.

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