Taxes and Justice

In 1944, when people actually paid for their wars, the top U.S. tax rate was 94% on taxable income over $200,000 ($2.5 million in today’s dollars). In the 1950s up until 1965, the top marginal rate was 91%. During Nixon’s terms and the first two years of Reagan’s first term, the top rate was 70%, then it dropped to 50%, and finally 28%. During George H.W. Bush’s time as President, the top rate stayed at 28%, but under Bill Clinton, it went back up to 39.6%, then under George W. Bush it remained at 35%. Now, it’s at 40.3%.

The point is that we have had substantial periods of time when the top marginal rate was 70% or much higher. Economic data from those years reflected a strong Middle Class, with good schools, good infrastructure, a strong economy, and the world’s most powerful military. We had money for foreign aid; our education was virtually free (except for those attending high net-worth schools such as Harvard, Yale, Princeton, and the like); and one income could do just fine to provide for a detached single family home, a family car, a two-week vacation, savings, and retirement. Now, it takes two (and sometimes three) incomes to do very poorly what one income could well perform in the ’50s to the ‘70s.

The neoliberalism of Reaganomics created a world view in which there was “socialism for the rich, and capitalism for the poor.” The rich thought that the poor should be content with the few…