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Paul Krugman | Let’s bring back the 91% tax bracket





Consider the question of tax rates on the wealthy. The modern American right, and much of the alleged center, is obsessed with the notion that low tax rates at the top are essential to growth. Remember that Erskine Bowles and Alan Simpson, charged with producing a plan to curb deficits, nonetheless somehow ended up listing “lower tax rates” as a “guiding principle.”

Yet in the 1950s incomes in the top bracket faced a marginal tax rate of 91, that’s right, 91 percent, while taxes on corporate profits were twice as large, relative to national income, as in recent years. The best estimates suggest that circa 1960 the top 0.01 percent of Americans paid an effective federal tax rate of more than 70 percent, twice what they pay today.

Nor were high taxes the only burden wealthy businessmen had to bear. They also faced a labor force with a degree of bargaining power hard to imagine today. In 1955 roughly a third of American workers were union members. In the biggest companies, management and labor bargained as equals, so much so that it was common to talk about corporations serving an array of “stakeholders” as opposed to merely serving stockholders.

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  • Billyjoe Jimbob

    Yes, my conservative Comrades, you are all correct in your collective realization that these facts can bear no rebuttal.

    It’s brutal, but true…the Oligarchs took you for a ride, rifled your wallet and would have put you out on the rain swept shoulder of the road like a ravished Virgin whose honor and treasure had been given lightly. You had all been lead down a path toward a Fascist-like enslavement, emPalined on corporate pikes by the business elite, the light of truth dying in your clouded eyes. Shielded from the truth by those who would enslave you, you almost bought into allowing yourselves to be ensnared by the Oligarchs! Almost too late…almost, almost.

    But!!! (cue loud trumpets, silver horns and angelic harpsichords) Take HOPE!!! Raise your eyes toward the heavens and a little to the left! See the Triumphant Arrival of the Liberal Host! Not Too Late! Not too late.

    The Liberal Host, led by those who deal in facts economic, scientific and logical,
    double checked data and model proven truths and who confidently show us the
    way, will make room in our Brave New Old World for you and lead you out of darkness
    and into the light of Keynesian Truth, Justice and The American WAY!! Yea, in our
    house there ARE many mansions whose monthly payments are keyed to your income and we be not parsimonious.

    Blessed Believers, we liberals have removed away the scales from your eyes and shown you the truth! Have Heart!! Yield to your HEARTS!

    Ye, who have now seen the truth, humbly and with a faith like that unto a child, believe and be economically, politically and socially Saved! Rise up from your seats! Step out into the aisle and freely, of your own will, Take the Portside hand of a Free, Left Leaning, Democratic Government and, with a yielding heart, accept the TRUTH!

    And pay your $#^$# taxes! We need to get this thing moving again.

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