The New York Times had a piece “The Rich Get Richer”. The writer is a long time Wall St. executive Steven Rattner. The article revealed that the 1% make a strong comeback in two years ago. “In 2010, as the nation continued to recover from the recession, a dizzying 93 percent of the additional income created in the country that year, compared to 2009 — $288 billion — went to the top 1 percent of taxpayers.”
He explained that the income gains are more and more going to the top. “In the Clinton era expansion, 45 percent of the total income gains went to the top 1 percent; in the Bush recovery, the figure was 65 percent; now it is 93 percent.”
One of the ways the rich suck up the money is by hypnosis, For 30 years these Rasputins have convinced the 99% that tax cuts are always necessary and that high tax rates make the economy collapse.
Over the weekend I heard economist Richard Wolff talk about tax rates in the 1940’s and he said the highest bracket was charged over 90%. That seemed unbelievable so I looked it up. Lo and behold he was right. The Tax Foundation has the figures for almost 100 years.
Back in 1944 anything you made over $200,000 was taxed at 94%. (Now a buck went further in those days, more than 10 times are far. The Tax Foundation estimates that $200,000 in those days is like $2.4 million today.) High tax rates on the top bracket lasted until the 1980’s. In 1981 the top bracket was 70%. The next year it went down to 50% and kept on dropping under Reagan.
Did those high tax rates cripple the U.S? Well, we paid for World War II and came out of it with no return to the Great Depression. The 50’s through the start of the ‘70’s were the golden age for U.S. workers in terms of money.
Today the highest rate is 35% though the rich don’t really pay that. They make most of their dough from stocks and bonds and that gets a special “capital gains rate” and dividends rate of 15%. That’s how Warren Buffet pays a smaller share of his income than does his secretary.