We became theMOST PROSPEROUS NATION EVERwith a top IncomeTxRate of89-91% for20YRS,(8YRS,ofEisenhower

[supraTruth]

)!TellCONS!

TWITTER EVERY1!

[blindpig]

1. ......

That was largely due to conditions prevalent after WWII, with the US being the only industrial power standing. The Cold War also played it's part as the capitalist were forced to 'play nice' domestically in the face of a competing system. Those conditions cannot be repeated.

[sam11111]

5. cold war was a drag on the economy: many nations prosper when wealth is unstuck--they collapse when

it stays stuck...look around at the failure of

-----------
Trickledown
----------

Again; Hoover cut the top tax....Great Depression
----RR cut again...Great Recession

Clinton in the 90's raised the top rate---and the Boom of the 90's resulted.

Globalism is the spread of "trickledown" idea around the globe; result?

Two billion pushed down into poverty. A third of humanity. Lives crushed.

Finland has highest Quality of Life score...and taxes the top. Ditto Denmark, which is highest in the Happiness Survey.

Trickledown is obviously false in its theory --- and the evidence proves it.

[blindpig]

6. Tell that to the arms dealers.....

In that period this country was so awash in money, the only major manufacturing country in the world with it's plant intact, that crumbs were available to keep the proles happy and create the illusion that capitalism did serve their needs. Not so much now, no indeed.

Trickle-down was the first step in adjusting to the end of that period as the international competitors started taking market share as their industries were rebuilt.

[sam11111]

2. the Golden Age is what economists call '45-'64: more at link below

When wealth is stuck at the top, folks can't buy what factories make...so factories close, firing us. -----------------------
Truman unstuck that wealth. ---------------------

---------------------
Sweden also had a Golden Age about '60 - '90, till the neocons there lied their way into power and wrecked things...same as here.
---------------------

For a think tank fellow's details, see--


http://www.ourfuture.org/blog-entry/2010041625/13-ways-90-percent-top-tax-rate-fixes-economy

[raccoon]

3. Where have you gone, DDE? Our nation turns its lonely eyes to you. nt

[econoclast]

4. And a MINIMUM tax rate of 20%

Be careful what you wish for....

Just checked some 1950's tax tables

Minimum tax was 20%. That was for " married filing jointly " and applied to incomes of 0-4,000

They went up from there

[happyslug]

9. But Gold was $35 an ounce not $1500, Most people earned less then $4000 a year in 1950

Yes, the lowest income tax rate was 20%, but most people earned less then $4,000 a year at that time. 1950 Median income (The point where half the US population earn less, and half more) was only $3,319, in 1955 it was only, $4,418 and in 1960 Median income was only $5,620.

http://nces.ed.gov/pubs98/yi/yi16.pdf
http://www.stanford.edu/class/polisci120a/immigration/Median%20Household%20Income.pdf

The Standard Deduction in the 1950s was $1000, thus a person who earned Median income, only paid 20% tax on $2,319 not the whole income of $3,319. Total tax was thus paid $463.80 on $3,319 which comes out to just under 14% of total income. For the half of the population that earned less then Median Income the real percentage dropped even more, till hit the people who earned less then $1000 a year, where the Income tax percentage was Zero (Remember Minimum wage in 1955 was only 75 cents an hour, and till 1955 did NOT apply to retail workers, thus in 1955 a minimum wage worker income, if he or she worked 40 hours a week 50 weeks a year (Two weeks off for unpaid Vacation) earned only $1500 (40 hours x 50weeks x.75 per hour). Thus a minium wage earner in 1955 paid 20% Income tax on only $500, or $100, which as a percentage of $1500 of only 6%.

http://www.nber.org/chapters/c2425.pdf

History of Minimum Wage:
http://www.infoplease.com/ipa/A0774473.html

Article talking about how, do to changes in the income Tax deductions and calculations, people who made less then $25,000 in 1950 (Roughly $250,000 in 2011 dollars) actually paid LESS in income tax in 1950 then they do today:
http://trumanfactor.com/2011/political-posturing/

In 1950 approximately 28% of people who FILED Income Taxes, paid no tax (This dropped to about 21% by 1960, do more to easing the tax withholding paid out of every pay check then anything else). Please remember this 28% does NOT include those people who did NOT need to file an Income Tax for their Income was to law, only those people who had to file to get a refund of the excess withholding.

http://www.taxfoundation.org/news/show/25962.html

Please note The "Standard Deduction" had been introduced in 1944 and it was a PERCENTAGE of Adjusted Gross Income subject to a cap of $1000 in the 1950s. This was changed in 1964 to the set amount we use today.
http://scholarship.law.georgetown.edu/cgi/viewcontent.cgi?article=1670&context=facpub

But to get to "Adjusted Gross Income" one had to take your personal deductions (I am assuming income from work, thus "Gross Income" and "Adjusted Gross Income" would be close, unlike people who had costs to incur their income, such costs were deducted from Gross Income to Get Adjusted Gross Income. In addition you had the right to take personal deductions based on the number of "dependents" in the home to get to "Adjusted Gross Income". You also had the option of taking more deductions then are permitted today, including interest on ANY debt not just mortgages.

Given the nature of deductions from income, the number of people opting for the Standard Deductions actually dropped from 82% in 1944 to just 52% by 1965.

http://scholarship.law.georgetown.edu/cgi/viewcontent.cgi?article=1670&context=facpub

My point here is simple, the 20% on the first $4000 of income was subject to various deductions so that many people ended up paying NO taxes even if they earned more then 1/2 of the people in the US. Furthermore $4000 was a LOT of money in 1950, more then 1/2 the population earned LESS THEN $4000, thus over HALF of the population was ONLY subject to the 20% rate and most, do to deductions, paid less.

[supraTruth]

10. Good & ENLIGHTENING Reply!

THANKS!

[econoclast]

13. Your calculations don't square with the sources you reference

Example:
You assert that a minimum wage earner in 1955 would pay only 100 dollars in federal income tax. You calculate annual earnings of 1500 dollars and a standard deduction of 1000 dollars leaving only 500 dollars taxed at 20% ... tax =100 dollars

This is wrong

The reference you cite regarding standard deductions in the 1959's makes clear that the standard deduction was 10% of adjusted gross income, CAPPED at 500 dollars for a single filer and 1000 for married filing jointly

Correct calculation for a minimum wage earner in 1955 would be

Standard deduction = 1500 X 10% = 150 dollars

Annual earnings = 1500

Taxable income = 1500-150 = 1350

Tax = 1350 X 20% = 270 dollars

Effective tax rate 18%


This is confirmed by the percentage of FILED tax returns with zero or negative tax liability
You correctly cite the 1950 percentage of 28% of returns filed in 1950 had no tax liability. ie - 28 % of returns filed got a REFUND of ALL their income taxes withheld through the year.

What you LEFT OUT was that the percentage of FILED tax returns with zero or negative tax liability in 2009 (the most recent year in the source you cite) is 41.7% ie - 41.7% of returns filed in 2009 got a REFUND of ALL their income taxes withheld throughout the year.

In fact, according to the source you cite, in 2009 more tax returns had no tax liability than the total number of ALL tax returns filed in 1950

1950 - ALL tax returns filed = 53,060,000
2009 - tax returns with zero tax liability = 58,604,000

Like I said...be careful what you wish for

And hint - if you are going to lie about the data ... Don't provide the sources

[happyslug]

15. Actually I did the Calculation and THEN found the source that it was capped

Starting in 1964, the Standard Deduction became a fixed amount, prior to that it was a percentage subject to a cap. I was trained to use the Standard Deduction as a fixed amount (I was actually trained to use the "Zero Bracket Amount", which was only in effect in the late 1970s, then the system reverted back to Separate Standard Deduction and Personal Deductions).

I revised my thread when I found the reference I used as to the pre-1964 method of using the Standard Deduction AFTER I did my calculations. By the time I typed in the changes and was about to change the Paragraph to reflect the pre-1964 method, the one hour edit period has expired, so I left it go.

I had also by then found the Personal Exemption for the 1950s were $600 for someone filing as single, $1200 for a couple (Even if only one was working, which was the norm in the 1950s) AND $600 for each dependent. Thus the error I did as to the Standard Deduction was more then off set by the error of NOT including the Personal Deduction for the 1950s. If you had the 2.4 children that was the average in the 1950s, Total Deduction of $2400 (Married couple, Two Children). If you earned $4000, and was married with two children, your TAXABLE income was only $1600 LESS the Standard Deduction. 20% of $1600 is only $320 or 8% of $4000. Remember this is NOT including the Standard deduction which as you pointed out was NOT $500, but a percentage subject to a cap. Given the Standard deduction most people paid about 2% of their income as Income Taxes (Remember $4000 was median Income for most of the 1950s).

Personal Deductions:
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=543

Furthermore the Standard Deduction was to be used when someone's Deductions (Other then the personal Deductions) did not exceed the Standard Deduction (This included things like interest on Credit Cards, car loans, student loan in the 1950s, the deduction for such interest was eliminated in the early 1980s under Reagan's rewrite of the Tax Code).

The law eliminating such interest from being deductible came around do to the fact by the 1980s most people were opting to NOT to use the Standard Deduction for the interests they were paying on car loans, credit Cards and other debts when combined with other deductions they could take exceeded the Standard Deduction. Reagan's solution was to raise the Standard Deduction AND eliminate the right to take such interest as a deduction (He did preserve the deduction for home mortgages but that was all).

Anyway, my point was most people did NOT earn more then $4000 in 1950, and a bare majority did by 1960. Given the nature of the Deductions permitted at that time, including the Standard Deduction AND the Personal Deduction, most such people were paying less then 2% on their income. Many were paying Zero.

The Minimum wage worker, if he did NOT take his personal exemption would have been paying 18%, but with the personal exemption of $600 for one person, $1200 for a couple, and $600 for each additional dependent, the rate would have been way zero (and if he was single living alone, $1500 less the $600 personal deduction is only $900, 20% of $900 is only $180 which is only 12% of $1500). This would be reduced by the Standard Deduction, but as you pointed out, it was a percentage subject to a cap and as such I am not doing the calculations (the IRS started to issue tables to reflect the Standard Deductions as part of the Income tax due, thus it would be more 18% then 20% on the amount left over AFTER the personal exemptions were taken).

Sorry, for the error, but the bigger error was me not finding the Personal Exemptions amounts till AFTER the period to edit my thread had expired.

[MannyGoldstein]

11. Something's wrong with that figure

I'm pretty sure that from IRS data, the median income earner actually paid about 7% - roughly half the rate they pay now. Are you forgetting about standard deductions or something?

[happyslug]

12. As I wrote in my thread, the EFFECTIVE rate was about 5%

We have to remember the 20% was on the first $4000, but you excluded the Standard Deduction of $1000 first (The $1000 deduction was a cap over a percentage test, which I will not go into here). Furthermore if you had Children, State income Taxes and Interest (any interest NOT just Mortgage interest) all could be deducted from Adjusted Gross Income (i.e. Taxable income). Thus once you start to look at the numbers, the rate may be 20%, the percentage of what was actually due on what you earned was less. In some cases 6% or less.

[happyslug]

16. It also does NOT include the Personal Exemption

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=543

Of $600 for someone single, $1200 for a Married Couple and $600 for each additional dependent. Thus a person earning $4000 in 1950 was married and had two children, his taxable income would have been only $1600 ($4000 less $1600 personal deduction for a married couple, and an additional $1200 do to have two dependent Children). From that $1600 you take off the Standard Deduction (which was a percentage off the tax rate but subject to a $500 cap) or the itemized deductions if they were greater.

Thus the $4000 wage earner paid taxes on only $1600 LESS the deduction he could take (Or the Standard Deduction which was an additional percentage off the tax rate but subject to a $500 Cap). IF we assume the whole $500 deduction that leave $1100 subject to the tax, or $220 total tax due, which comes out to about 5%.

[WinkyDink]

7. The extremely wealthy are not patriotic; they are their money, and their money goes where it gets.

[dmosh42]

8. I grew in those years, and it seems we were more of a 'whole' nation,..

but were still having upheaval in civil rights and labor strife. But even the biggest corporations fought any ideas of (no tariff) 'free trade. We all understood that meant being pitted against slave labor, and even many of the wealthy had enough pride to keep that from happening, at least in public. I came out of the military in 1964, a high school diploma, but still could have a variety of jobs available to me. Some time during the 70s was when the Japanese really started the uneven playing field, although the politicians were saying the opposite. From there it was all downhill, with our 'trusted' govmint selling the country out for any bribe. Then the rich figured that they could be 'international', and still run companies overseas and sell their products in the USA with no tariffs!(Free trade)And the profits were huge from the slave trade. And our people kissed the billionaires asses because they thought it would trickle down! What a fucking mess now!

[redqueen]

17. Actually there is a group of patriotic millionaires

who call themselves just that, and they are campaigning for higher taxes on their incomes.

[AngryAmish]

14. Lets burn Europe and Japan to the ground again!

USA! USA! USA!!1!