(click graph to see full size version) I was just looking at this really interesting infographic of the income tax rates for the United States over the last century or so. It is an interesting graph because it makes it very clear that the wealthiest people are paying the lowest taxes by percentage of any time in our country’s history. By contrast the low and middle class are paying the most they’re paid or close to the most.
I’m not sure how the government got away with a 90% tax rate in any time period, but it sure looks like they did. As much as I think the wealthiest people need to pay more again, nobody deserves that. It makes the 5-10% increase in taxes we need on the wealthy people making over 1 million a year now seem paltry and insignificant.
According to the graph the yellow areas say that in the 50’s and 60’s if you made more than $10 million you gave 90% of it to the Government. Wow. (9 million?) That doesn’t really seem plausible although they tell a story about boxing matches being held only yearly for this reason. There has to be something between 90% and 35% though because these people are the cash cows of our country/economy and are the only ones that can actually pay for the fancy jet security and government health care.
Also I found it interesting that in the early 90’s people making less than 10K had to go from 0% tax to 15%? That is a big loss for the part-time workers of the country and it happened just in time for me to start working at my first job. Someone making 9K would lose $1350 to taxes, a huge sum for someone who may be just scraping by. Previously in history this tax bracket was taxes between 10-20%, so it has been higher, but the logic seems difficult that the people who make the least are losing the least also. Maybe if more government programs like healthcare actually give back to this income bracket this will be a more justified expense.
I am also surprised looking at the top income bracket at 50% through the 1980’s and it re-frames how to think about Ronald Regan’s presidency (known for cutting taxes), but seeing that he got a larger percentage of paychecks to finance things with during a time of de-regulation and government cuts, no-wonder he was able to make things work. I doubt he would have believed that the tax rates should go as low as they are today though seeing how much government is expected to provide.
Seeing over time how high these income tax rates have been in order for the country to survive and knowing what people expect from government right now (more services), I think we will have to return to the previous income tax rates and raise business tax rates at the same time to make up the difference even in a good economy. We have a huge budget deficit, increasing costs and government loans that are ballooning (bonds that are declining in value). Things aren’t looking good. It’s all our civic duty to pay taxes and the country can’t survive without it.