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?
Printing presses.
Not a good response, anyone else?
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.
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
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.
I forgot :
The graphs I made off the websites exclude state and local, so just federal
http://www.usgovernmentrevenue.com/
http://www.usgovernmentspending.com
They weren't high, check the tax revenue. Secondly the government's operation is now funded by the selling of bonds.
Take into consideration that the size of the economy has nearly doubled per capita (well, 1.5x or so).
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.)
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.
Taxes have little relation to spending % of GDP everywhere due to the ability to borrow.
Sources:
http://www.presidency.ucsb.edu/ws/index.php?pid=16171
http://www.presidency.ucsb.edu/ws/index.php?pid=16342
http://www.presidency.ucsb.edu/ws/index.php?pid=16363