HOW DO THEY WORK IN OUR SOCIETY, RICH VERSUS POOR. YOU'LL LEARN ABOUT IT HERE.
FACTS ARE WHAT WE NEED AND I GOT 'EM.!
Since
everybody on the Right and Left describe our economic troubles today
as like the 'Great Depression' then why don't we see any stories
recounting how we got out of the Great Depression? Here's how we did it!
After
the stock market crash in 1929, when our tax rates on the most
wealthy were similar to today's rates, we raised the rates on the
richest Americans to double or triple what they are today.
From
1930-80 the wealthiest Americans paid between 70% to 90% federal
income tax and that's what allowed us to build the American Dream.
How else could we afford it? Between 1930-80 we fought and paid for
WWII, the Korean War and Vietnam War, we built our entire US
Interstate Expressway System, Roads, Electrical Grid, Telephone, our
main Bridges and Tunnels-We Made every Car we Drove and we wore just
the Clothes we Sewed and WE WENT TO THE MOON SIX TIMES-AND WE PAID
FOR IT ALL!
Here's the link. Go to section 21.5 and Get out ye encyclopedias... TRUTH LINK:
AND DON'T EVEN TRY TO SAY...'But there were many deductions that made it so the richest didn't pay all those higher tax rates.'
Really?
I am listing the formal tax tables here, no one who makes this
argument, that deductions negated the higher rates, has even begun to
account for me what these many mysterious deductions were AND WHAT'S
MORE if you add up the price of all these mega-accomplishments we made
during those fifty years you will see that we would indeed need far
more tax revenue from the rich to pay for them! The Hoover Dam! The
Golden Gate Bridge! We can't touch this long list of national
accomplishments today, we can't afford it! Because the Rich are not
paying the 'fair share' they did when we built this country!
So to the rich I say, these numbers below are high, but this is what we did before to make our country strong and great!
Chip Shirley
http://brounforsenate.blogspot.com/2013/02/stop-obama-legalize-marijuana.html
ReplyDeleteWe did have a huge deficit in the 30s and 40s which we started to pay down only in the 1950s - and we still accomplished quite a bit. This is proof that a deficit will not destroy the economy or the country. A larger deficit now to invest in infrastructure (and the resulting jobs) will result in more revenue coming in, which will decrease the deficit.
ReplyDeleteExactly! Very good point. Thanks.
DeleteAlso this excerpt from my sidebar...
Lower Tax Rates Bring in More Revenue-Not Really...
'It works every time it's been tried' blares the conservative radio host of your choice. But not so fast...here's how that myth breaks down. If an economy is growing at a very fast clip and increasing in size year after year, that is one thing. Under that circumstance (as was the case in 1965 when our upper rate was lowered from 91% to 70%) then it is indeed possible to garner more tax revenue at a lower rate of taxation because you are, in effect, taking a smaller bite of a bigger pie. But this is a temporary result and depends on the economy continuing to expand. And since a prime factor in the continuing growth of any economy is that a nation stay up to date on modernization and maintenance of its infrastructure, that means this formula for increasing revenue by lowering taxes must inevitably be reversed if a nations economy is to stay strong. Nothing is static in economics!
When tax rates were 70% there were a myriad of loopholes and tax breaks that were available to wealthy people. NOBODY paid anywhere near that much and most very high income people paid less than they do under today's tax code. Reagan's tax simplification and rate reductions brought in more money and helped unleash a decades long economic expansion.
ReplyDeleteAs to:
ReplyDelete"AND DON'T EVEN TRY TO SAY...'But there were many deductions that made it so the richest didn't pay all those higher tax rates.'"
Try again:
"Although the statutory top marginal tax rate was over 90% in the 1950s, the average tax rate for
the very rich was much lower. The average tax rates at five-year intervals since 1945 for the top
0.1% and top 0.01% of taxpayers is shown in Figure 1. The average tax rate for the top 0.01%
(one taxpayer in 10,000) was about 60% in 1945 and fell to 24.2% by 1990. The average tax rate
for the top 0.1% (one taxpayer in 1,000) was 55% in 1945 and also fell to 24.2% by 1990,
following a similar downward path as the tax rate for the top 0.01%. Between 1990 and 1995, the
average tax rate for both the top 0.1% and top 0.01% increased to about 31%. After 1995, the
average tax rate for the top 0.01% was lower than that for the top 0.1%.
Taxes and the Economy: An Economic
Analysis of the Top Tax Rates Since 1945 - Thomas L. Hungerford
http://graphics8.nytimes.com/news/business/0915taxesandeconomy.pdf
Nice try, but I've got this argument and issue fully circled...We had to be effectively bringing in vastly more revenue during this high tax period because of the things we did and the bills we paid...No debate.
Delete-Between 1930-80 we fought and paid for WWII, the Korean War and Vietnam War, we built our entire US Interstate Expressway System, Roads, Electrical Grid, Telephone, our main Bridges and Tunnels-We Made every Car we Drove and we wore just the Clothes we Sewed and WE WENT TO THE MOON SIX TIMES-AND WE PAID FOR IT ALL!-
Your "argument" is simply not supported by historical fact.
ReplyDeleteYour offer two significant untruths:
First, your contention that, "...we paid for it all." is clearly false. During the 50 year span between 1930 and 1980 the U.S. experienced only seven years of budget surplus. In fact, annual expenditures were 33 percent bigger than annual tax receipts on average during this period. Excluding the war years from 1941 to 1945, annual expenditures on average still exceeded annual tax receipts by 23%. Had "we paid for it all", we would have accumulated no debt during this 50 year span. Source: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/hist01z1.xls
Second, your claim, "We had to be effectively bringing in vastly more revenue during this high tax period..." is weak at best since the 1930 to 1980 period did not see higher tax receipts relative to the size of the economy compared to more recent periods.
Sure, tax receipts grew nearly 100 fold in dollar terms from 1930 to 1980 as show in the White House data sourced above, but this is only a nominal fact of little significance. Clearly the more meaningful consideration is tax receipts relative to the size of the economy. In fact, between 1930 and 1980, annual receipts as a share of GDP averaged 12.9%. Comparatively tax receipts as a share of GDP averaged 13.2% from 1981 through 2012. In short, tax receipts relative to GDP were smaller from 1930 to 1980 than since. Source: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/hist01z2.xls
So, in review, I showed earlier with reference to Congressional data that the rich never paid an effective margin tax rate anyway near the then legal top marginal tax rate of 91%, and now I have shown with reference to White House data that we actually did not pay for it all (except through increased debt that we are still growing and servicing today.)
So, are you going to keep posting falsehoods here, on USAToday, or elsewhere?
That is an utterly ridiculous false argument very similar to those made before we began drastically raising tax rates after the 1929 stock market crash. You're using a magnifying glass to analyze global weather patterns. Sheer idiocy!
DeleteOf course we had some debt during the period I focus on, but it was easily manageable, unlike today's. Yo are not even focusing on inflation when comparing federal revenues.
I will keep spreading the truth and the truth will win out and you will either evolve or be forgotten.
No counter data or sources of any kind from you. Rather just more inane hyperbole now coupled with personal insults from you.
ReplyDeleteAs to not focusing on inflation, get real. I clearly couched my time-series comparisons with respect to GDP. Thus adjustment for inflation is inherent in my claims.
Finally, as I said, between 1930 and 1980 tax receipts as a share of GDP averaged 12.9%. Between 1981 and 2012 tax receipts as a share of GDP averaged 13.2%. So, again, how do you conclude "We had to be effectively bringing in vastly more revenue during this high tax period?"
Your failure to answer indicates you either don't understand historical reality or you are intentionally distorting it.
Take 1987 as a mid point and look 30 years back and compare that to 1987 to the present. From 1957 to 1986 our tax rates on upper income earners were double and triple the rates we adopted in 1987 to the present. In 1987 our debt and deficits were undoubtedly lower and our economy in better shape as a whole than today. From 1957 to 87 we managed the cost of paying off WWII, the Korean War and the Vietnam War, we built our entire Interstate Expressway system under Republican Eisenhower and we put men on the moon six times!
ReplyDeleteSince 1987, when we slashed taxes on the rich, we haven't done shit, except go into debt.
So now you pick a different magnifying glass.
ReplyDeleteOkay, well from 1957 to 1986 tax receipts as a share of GDP averaged 14.6%, versus 13.1% from 1987 through 2012.
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/hist01z2.xls.
So, is it really your contention that the lion’s share of growth in our national debt since 1986 has been because we collected 1.5% less in tax receipts as a share of GDP annually than in the 30 years before?
Keep in mind, this missing taxation of 1.5% as a share of GDP annually from 1987 through 2012 would have represented nominally $3.8T in additional tax receipts (or $4.2T in additional tax receipts in 2005-inflation-adjuested dollars) in total over the 35 years from 1987 to 2012.
http://www.bea.gov/national/xls/gdplev.xls
Also keep in mind the national debt was at $2.1T in 1986. Today is stand at $16.1T.
http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm
So, if we have failed to collect $3.8T in tax receipts since 1987 (and presumably from the rich because from where else could it have come) compared to the glorious taxation period from 1957 to 1986, then what accounts for the other $10.2T in debt we've added since 1986?
Any objective analysis must conclude that the bulk of our current economic malaise is traceable to overspending, not under taxation.
Three things...
ReplyDeleteFirst, you must subject the lost revenue to the COMPOUND INTEREST on our debt. That's huge.
Secondly...If you add up the costs of the wars and infrastructure projects we managed during period 1 you will see that we can't dream of doing that today, in period two. Why?
Third...If we had continued to tax and spend on modern versions of those infrastructure innovations we made in P-1 we would have remained more competitive V the world (China) industrially and maintained a higher GDP and employment and saved on our social safety net expenditures.
On the first thing, huge? Well, maybe to you and me. But given that average annual tax receipts as a share of GDP have been just 9.59% smaller since 1987 than in the 30 years before, the compounding effect on the missing receipts accounts for only about $1.5T of the $10.2T in newly accumulated debt otherwise not accounted for by lower taxation as a share of GDP since 1987. This is based on compounding of the annual tax receipt deficits (averaging $152B on average per year given the missing $3.8T tax receipts spread out over 25 years since 1987) and using the annual yearly fed funds rate published by the feds.
ReplyDeletehttp://www.federalreserve.gov/datadownload/Output.aspx?rel=H15&series=c7ca9f58d350a500bb83e230e208cf9b&lastObs=&from=&to=&filetype=csv&label=include&layout=seriescolumn
So, this still leaves about $8.7T in new debt since 1987 unaccounted for by lower tax receipts as a share of GDP since 1987 compared to the 30 years prior. IOW, overspending remains the main culprit.
As to things two and three, you are leaving the empirical and entering the realm of the dismal. How do you propose to show that GDP would have been bigger had an additional amount equal to 1.5% of GDP since 1987 been taxed from the private sector and spent in the public sector? You still have an $8.7T albatross around the public’s neck to solve for as I've shown above, and you have ignored the possibility of crowding out of private sector activity.
I also wonder about your frequent reference to our wars. Are you suggesting that government spending is always ultimately beneficent even when spent for large scale war? Even if war spending is good for the U.S. economy, it is really good for the world economy or humanity in general? It seems akin to the broken window fallacy on a tragically worldwide scale.
Wow, this is like a child trying to debate with adult. One one had you have an argument support by facts and figures, the other side is just general statements with little or no supporting facts. Nice try Dixie, but your entire argument is pretty weak. Good job dfairchild!
ReplyDelete