Skip to comments.need help refuting leftist claims about 1950s tax rates
Posted on 10/09/2010 10:42:15 AM PDT by mainestategop
Im preparing to write an article about Liberal myths and lies concerning Bush Reagan and Obama and I keep coming back to this claim that liberals have been making on youtube and several other places that in the 1950s taxes on the wealthy were at an all time high and our economy was flurishing. Any old timers from that bygone era care to comment? Has anyone heard this?
Government needs to lower taxes, and get out of everybody's hair.
Either they do it, or we will.
“Flourishing” is a relative term.
Houses were smaller. Most families had one car (if any). Medical care was about what you’d get at a minor emergency center, at best.
Basically, everyone’s standard of living was probably about the level of what the poor/lower-middle class is today.
I don’t know the numbers but Kennedy wouldn’t have run on reducing taxes if this were true. Remember we were still recovering from FDR and the war in the fifties.
These 4 happy conditions no longer exist. The moral evil of confiscatory tax rates aside, low marginal tax rates are now utterly necessary (as well as a number of other things) for the US economy to resume flourishing.
Insofar as your leftist acquaintances are working, whether they admit it or not, for the destruction of the US, they will perforce also support higher marginal tax rates.
I am not that old but the did have ratio write-offs. The largest was 1017-1 so if you put a dollar in your company you got to deduct 1017. You could also deduct all interest on credit cards, hell everything was deductible get a copy of 1950’s tax return.
I watch bryan gumbal on good morning America (that goes way back) they had a guy put his tax return on tv. He made over 1 million dollars and after doing his taxes he got a refund of over 300,000.
It’s true the income-tax brackets were higher then, than they are today.
However, however, however.
Nobody, but nobody, ever paid 90% (or whatever) in income taxes.
The rate was on the books, but nobody paid them.
Loopholes; managing one’s money so as to have to pay as little as possible in income taxes.
Old Man Joe Kennedy was a pro at doing that.
The reality is although the rates were sky high, so were the number of deductions one could take that effectively wiped out the rates. When Reagan created his tax cuts, the receipts to the Treasury more than doubled because he also took away many of the traditional deductions like medical and credit cards.
I’ve always said that if people today had to revert to the standard of living of the 1950’s there would be weeping & wailing & gnashing of teeth.
We do not realize how materially blessed we are these days.
PS The 50’s were just great!
In 1952 U.S. Steel Corp. alone made more steel than the rest of the world put together. There was little if any competition, there was pent up demand from WWII, and we were rebuilding Europe and Japan. We had not created a welfare state and the top rates applied to much higher relative incomes IIRC. There is no comparison to today.
Hemingway was scrupulous in staying in Cuba at least six months and a day, every year. It wasn't just because he loved the place.
"Considering that the top marginal tax rate for the wealthiest Americans today is 35 percent, that figure seems astounding. But it's true that in the 1950s, the top marginal tax rates were over 90 percent.
So does that mean that someone in 1955 making a half million dollars had to fork over $450,000 of it to Uncle Sam? No.
We are talking here about "marginal" tax rates. Moore doesn't go out of his way to explain this, so we will. The marginal tax rate is the top rate of income tax charged to individuals on their last dollar of earnings. So in 1955, for example, when the top marginal tax rate was 91 percent, that was the tax rate owed on a person's income over $300,000. That person would, however, pay 20 percent on the first $2,000 of income; 21 percent on the next $2,000 in income; 24 percent on the next $2,000 and graduated on up to the highest rate. On average, a person making, say, $500,000 would pay substantially less than 90 percent of their income in federal taxes.
The top marginal tax rates peaked in 1952 and 1953 at 92 percent for income over $300,000.
Bob Williams of the Tax Policy Center:
In 1952 and 1953, Williams said, when the top income tax rate was 92 percent for income over $300,000, a person would have to make waaaay more than $300,000 to actually end up paying an average of 90 percent of their income. According to Williams, someone would have to make $2,328,400, and therefore pay $2,095,560, to get to that 90 percent threshold.
But people with income of less than $2.3 million remember we're talking about 1952 and 1953 would have paid, on average, something less than 90 percent, and perhaps much less.
Still, Moore's point is valid. The top marginal tax rates paid by the richest Americans were far higher in the 1950s than they are now. In 2009, the top marginal rate was 35 percent on income above $372,958. And although Moore didn't use the term "marginal tax rate," he did say "top tax rate." People without CPAs might mistake that for a person's average tax rate (it's not), but it's valid wording. And so we rule this one Mostly True."
Personally, I really don't care how today's tax rates stack up against those in the 50s. It clear that billions are being wasted by the lard-arses in government. Give that money back to those that earned it.
The myriad variety of exemptions/deductions/marginal rates over the past 97 years makes it IMPOSSIBLE to conduct a valid analysis of income tax changes over the years!
For every specific income profile it will vary from year to year and, no meaningful conclusion can be established. You can't compare SPECIFIC APPLES TO SPECIFIC ORANGES!
P.S. This is not by coincidence, it is by design! This year's congress ALWAYS "giveths with one hand and takeths away with the other"!
Yahoo search results for "tax rates" "historical"
Yep, income taxes were higher. The difference was that they didn’t have all the rules and regs that kept businesses from expanding and new ones from starting up. The economy took off even better once the war time tax rate was abolished, but then the greenies gained the upper hand sometime in the late 70s, early 80s and businesses started failing and new businesses were unable to get started as easily.
This was the reason the “Alternative Minimum Tax” was devised during the 1960s.
Despite having 75-90% tax brackets, many of the wealthy and super-wealthy got away with paying no income taxes at all.
There was the case of the multi-millionairess Marjorie Merriwether Post (I think that was her name), the heiress to the Post cereal fortune, at the time the wealthiest woman in America, who paid zero—not a cent—in income taxes for decades.
That’s why the “Alternative Minimum Tax” was invented.
This doesn’t give actual tax rates but is a lengthy series of quotes from JFK pointing out that lower taxes increase revenue. He talks about how it increases employment etc.