History

Re: 1950s tax rates

No2statism — Wed, 10 Nov 2010 14:54:29 GMT

I'd assume there wasn't a whole hell of a lot of revenue with a 91% top marginal rate, because not as many people would be working. Even if Obama were to raise the top marginal rate from 35% to 39.6%, that would only bring in 70B more/yr.

Re: 1950s tax rates

Laotzu del Zinn — Fri, 05 Nov 2010 05:48:10 GMT

I'm pretty sure there were far more deductions and loopholes back then. I think I remember hearing that JFK's massive tax cuts were only able to be done due to new ways of shoring up said deductions and loopholes. And actual tax rates remained largely the same in practice, rather than on paper.

Re: 1950s tax rates

B-man — Fri, 05 Nov 2010 05:27:38 GMT

Tax rates were 90% but they were marginal rates. An individual's earnings would be taxed at approx 20% on the first $2,000, 21% on the next $2,000, etc graduating up to the 90% tax rate which you would not fall under unless you earned in excess of $300,000, whats $300,000 inflation adjusted dollars today?. I've read that an individual would have to earn several million dollars in 1950's dollars to be fully taxed at the 90%.

Additionally *everything* was tax deductable, they were so pervasive that the AMT (Alternative Minimum Tax) was eventually introduced to offset the myriad deductions.

http://www.hoover.org/publications/hoover-digest/article/5728

Re: 1950s tax rates

resist272727 — Fri, 05 Nov 2010 03:52:19 GMT

@ Brian

It's beside the pont mainly because (a.) the highest tax brackets effected very few people ($2.5 million/year adjusted for price inflation and that was hard to come by back then) and (b.) people could get away with not paying their taxes even better than now.

Keep in mind that the top rate is NOT the only rate and is always what hardly anyone pays.

P.S. the top BRACKET was 94% but the effective rate was never allowed to go over 90%.

Re: 1950s tax rates

MisguidedThoughts — Fri, 05 Nov 2010 03:18:57 GMT

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

Re: 1950s tax rates

Caley McKibbin — Fri, 05 Nov 2010 03:10:17 GMT

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

Re: 1950s tax rates

BrianAnderson — Fri, 05 Nov 2010 02:38:29 GMT

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.

Re: 1950s tax rates

MisguidedThoughts — Fri, 05 Nov 2010 02:33:06 GMT

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

Re: 1950s tax rates

BrianAnderson — Fri, 05 Nov 2010 02:30:44 GMT

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.)

Re: 1950s tax rates

Jonathan M. F. Catalán — Fri, 05 Nov 2010 02:20:19 GMT

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

Re: 1950s tax rates

MisguidedThoughts — Fri, 05 Nov 2010 02:10:44 GMT

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

Re: 1950s tax rates

nirgrahamUK — Wed, 27 Oct 2010 19:11:57 GMT

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

http://www.usgovernmentrevenue.com/

http://www.usgovernmentspending.com

Re: 1950s tax rates

nirgrahamUK — Wed, 27 Oct 2010 19:10:41 GMT

I forgot :

Re: 1950s tax rates

Mtn Dew — Wed, 27 Oct 2010 19:02:13 GMT

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.

Re: 1950s tax rates

nirgrahamUK — Wed, 27 Oct 2010 18:44:14 GMT