There were very few people this applied to.
The real reason is the corporate tax rate. It was 52%. Today it’s 21%, and it’s effectively close to zero for many corporations with the tax loopholes used to avoid taxation. Shell corporations, deferring taxes, what have you.
So the US has lost more than 50% of the corporate taxes collected since the ‘50s.
E: the decline in tax % is pretty closely followed by the dramatic rise in CEO compensation.
The wealth being funneled to the top by cutting corporate tax got us the billionaire oligarchs we’re dealing with today.
We are long overdue for a hard reset. We need a new government with a modern democracy, then the assets of the top 0.1% need to be nationalized. Let them keep enough wealth to still be in the top 10%, but hit them hard and fast. Also, we should do what china does and to end offshoring by forcing companies to sell 20% of their company to the US government if they want access to our markets. Next, we need tax breaks for companies who spend more money compensating their workers than giving money to the parasitic shareholders.
Let them keep enough wealth to still be in the top 10%, but hit them hard and fast.
That’s fine for the ones who cooperate.
Seeing the numbers laid out, even though I already knew it was bad, is profoundly depressing.
The wealth was also built on the back of exploited Afro Americans. Remember that even Brown happened in the middle of the fifties.
Yes but that was when manufacturing was 33% of the workforce.
Today it’s only 8%. Machinery and robots do the labor and generate extreme wealth in tech and other spaces.
So theoretically you would not REQUIRE the same degrees of exploitation to achieve a middle class similar to that time period.
The win of factory and laborers work is unionization. Tech means decentralized workforce and less likelihood to trust your peers and unionize which was one of the largest wins of the 50s. When you are rubbing elbows with your coworkers - and are geographically living through similar cost of living as your colleagues - you are more likely to strike or require the same or similar types of improvements at the same moments.
What people in the US are failing to understand is that there are still good manufacturing jobs in the US today. Pharmaceuticals, aerospace, biotech, etc. They’re just on the higher end and require some type of technical or bachelors degree. Although, with the current regime and how they want to run (or not run) education, makes it seem like they want to bring us back to a developing country status where labor standards are low and manufacturing jobs are “low skilled.”
Yeah totally agree - which should make workers movements that prioritize wins for all American workers the goal. Child care / education systems that work / health care coverage that works - helps the 8% rugged manufacturing as well as like 50% of the active work force. Vs. bringing back high labor work / low skill - which if we pull it off would mean I what? 2-4% expansion of those industries? So…. 12% of the workforce would be prioritized? (as they expand those sectors).
Internal manufacturing to secure specific interests makes sense. (Medical supplies like during COVID or reduction of reliance from certain super powers sure.
But the current admin is at odds with financing sectors or even stimulating or supporting sectors with policy (it’s actively cutting and damaging policy in them) while also slamming tariffs across the very same sectors.
So it makes no sense. But that’s what I figured going into all this. We are reducing class mobility, while reducing health and safety, with every policy and cut. While increasing the debt simultaneously. It’s wild.
And really only included white Christians.
And men. Single women had few options.
Don’t forget it took a democratic US president getting elected four times in a row to set up that tax rate. This tax status took about 30 years to fully reverse.
And once we did in 1983 the US government took in more not less tax revenue. Your top marginal tax rate can be too high and 91% was too high
The US government took in less total tax revenue in 1983 compared to 1982. Do you have a source?
They infact did not have a source
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But then they’d have to dodge taxes by reinvesting in their company’s reputation and their workers. Instead of just cashing out, they’d have to maintain the company reputation as an asset that would pay them forever, as long as the company stayed healthy.
Is that what we really want?
Anyone with a billion dollars should be taxed at 110%
I hate that people will argue that highly taxing billionaires is disciplining success. Really? In what way? At what point is the success of their brand, product, or company no longer really theirs? When you’re a megacorp with hundreds of thousands of employees what about the success they are producing? It’s preposterous to keep holding these oligarchs up on a pedestal and continuing to pretend that they add any real benefit to anything other than the optics their PR people invent for them.
Also, define success. Please, seriously, just do.
Billionaires have failed as humans. They are complete failures. Zero respect for them or their means of money grabbing.
Agreed. Also, billionaires like Musk would still be able to skirt around those taxes by sharing his wealth with his 50 children and baby mamas so it wouldn’t even hurt him, it would just limit how much power a single person could have.
Entertainment IP creators like Taylor Swift and JK Rowling is mainly down to their success.
Yeah, but I would say that is the outlier not the norm. Though, I’m arguing success not talent. At what point has your talent gotten you x amount of fame and fortune and at what point do you not 100% own that success? In both cases, Taylor and JK have an entire crew around them. Makeup Artists, PR people, media personalities, photographers, managers, band members, roadies, and so on and so forth. At what point is a CEO or even a self starter not really 100% owning what the company, product, or persona is? At what point is it down to thousands if not millions of people holding you up? I just think it is something that no economy has ever really determined. It takes a village whether it is fans, consumers, family, friends, coworkers, associates or whatever to build something that can be considered great. I just feel like there’s a point where a person really needs to step away and say that it is no longer just MINE anymore, but I’m not greedy either.
At what point is it down to thousands if not millions of people holding you up?
I agree with your broader point. For example, Warren Buffet has not done $150bn of work.
Swift and Rowling do have support to make their pie grow much larger than 1bn, but I chose those billionaires because without their contribution there would be no pie at all.
Imagine if the doctor who invented the vaccine for polio demanded a billion dollars. Everyone would be rightfully disgusted even though it was one of the most valuable contributions to humanity of all time. The polio vaccine has saved our country trillions.
Now why is a singer entitled to billions if a vaccine scientists aren’t? No one needs or deserves billions. No one.
Not here to argue comparative renumeration.
My point is that there are some individuals are directly worth +1bn. 10 million people paid much more than $100 to see Swift’s last tour. That’s objective fact, not subjective opinion.
I would certainly join 1bn other people to give the polio vaccine inventor $1.
I never understood what you guys mean when you say they should be taxed more. Like… they are taxed for their income under the same laws you are?
Billionaires are not literally sitting atop a pile of a billion dollars in cash. Their “wealth” is unrealised, which means it’s the net worth of assets that they haven’t cashed in. In most cases they can’t cash in their wealth in even if they wanted. How will you tax them on money they just don’t have?
Tax them on loans against those assets. If they can spend it, it’s fucking income. Enough bullshit.
Fair enough.
Regardless of their wealth being in M1, M2, or M3, it is wealth taken off the backs of the working class and given to the hands of a few people. Taxing it is the most conservative approach to giving it back to the people who actually created that wealth; it’s a solution that works within the existing political system.
Money itself is an abstraction for wealth. Sometimes, it can be a useful one. But take the abstraction away and think about the stuff it actually represents. Taxing that “unrealized wealth” may reduce GDP in a technical sense, but GDP is an abstraction built on an abstraction. Constantly rising GDP is not a good end goal in itself. Ensuring that everyone has their basic needs met is a much better one.
Lots of big words but nothing of value. Answer the question buddy, how will you tax people on money they don’t have?
They will sell it.
That’s why I say it’s going to cause a drop in GDP, but that’s only a problem if you hold tightly to the abstraction.
It won’t be just a “drop in GDP”. It will be investments falling apart, industries closing down, credit getting scarce, unemployment, misery, destitution and death.
Money is a very real driver of the world. It is also the realest manifestation of wealth. Only a fool would call it an abstraction.
What else would it be but an abstraction? As I said, it’s sometimes a useful one, but it’s an abstraction. It’s not dirt or concrete or computer chips or food.
Maybe we shouldn’t build a whole society around an abstraction like that?
I feel you, and that’s a problem because if you want to tax a billionaires “unrealized” profits, you probably also have to tax some poor shmuck’s unrealized 401k profits when they have like 100k stashed away. I’d be cool with higher consumption/sales taxes for ultra rich person items: third or fourth homes, property in the “x” percentile of value above the average, luxury items like yachts or Ferraris. Theres a whole world of solutions, if only we could get the the politicians to enact them.
Or hell, just make them sell their stocks and pay tax on unrealized profits for anyone above like “x” millions. They’ll be fine at the end of the day, and it’ll dilute their corporate ownership once the company gets too big anyways.
I have a significant 401k savings. If it means building a society that takes care of people’s needs better–including my own when I’m too old to work–then I’m totally fine throwing that away. Edit: to add, it gets me to where I wanted to be with a 401k, but by a different route that works for more people.
Are luxury items not already taxed more? AFAIK they are in most countries.
Or hell, just make them sell their stocks and pay tax for unrealized profits for anyone above like “x” millions.
That will tank the share market, close down industries and cause even more unemployment and widespread misery.
bUt ThE jOb CrEaToRs
Honestly, if they are, then I’m. It rich enough to have heard about it–in the US at least.
How would making a CEO sell their stock crash market prices? If anything, it would just moderate values slightly by increasing supply. Who says this stock market system is the right system anyways? If dethroning assholes like Musk crashes the system, then we need to modify our system.
Investors put money on ventures and industries precisely to build wealth. If they are to be forced to divest at any point, they won’t be interested in investing at all. Credit will dry up, overall liquidity will fall. Recession.
Or maybe they’ll just have to invest in a diverse group of assets like how mutual funds are already setup?
Well… except no, it was made possible by a surge in consumption fueled by massive government infrastructure investment and forced savings during WWII. Industry was flush with money from government contracts, people were trained and educated in all kinds of skills, and because so many consumer goods had been either rationed or unavailable due to war production, the average person had lots of savings to spend. Almost nobody (maybe even literally nobody) paid the top income tax rate, because the wealthiest people get the vast majority of their income from capital gains, not salaries.
NOTE: I am NOT saying taxing the rich is a bad idea, I’m saying the 91% top income tax rate was NOT what made 1950s prosperity possible. The trick is not to get all your “knowledge” from memes.
Capital gains and allowing businesses to write off expenditures as a tax break are horrible things imo.
It’s up there with drug ads and PACs.
I agree, capital gains shouldn’t be treated as special and privileged. But as long as they are, an ultra-high top tax rate on regular income is just empty PR and will not effectively tax the rich.
What you’re saying about expenditures doesn’t make sense though, because if you take in $10 but spend $8 to do it, you should only be taxed on the $2 you gained, because you don’t have the $8 anymore. The term “writing off” is just accounting slang for keeping track of costs.
There are, however, phony write-offs that shouldn’t exist because they don’t represent reality. For example, real estate depreciation. Depreciation, if you don’t know, means spreading out an eventual cost over a long period of time. For example, a factory machine will have to be replaced in say 10 years, so instead of waiting until you actually have to spend that money to replace it, you’re allowed to take 1/10th of that loss per year. That makes sense because the eventual expense is real.
But if you own rental property you’re allowed to depreciate it as well - as if the property will gradually wear out and become worthless like a factory machine. This is ridiculous because the value of real estate almost universally goes UP over time. Fake but totally legal writeoffs such as this are just a gift to property owners, and should be eliminated from the tax system.
To put the business example into how it works for the rest of us: If i make a thousand dollars a year and spend $900 on housing, food, clothes, gas and a little getaway, I should only be taxed on $100 of net income. Why? I only profited $100. The 900 were expenses, tax the people who end up with the money, don’t tax the person who didn’t manage to save it. Every dollar was given to some business - surely those businesses profited or otherwise put that money to someone else.
Right now a dollar can change hands a hundred times in a year and get taxed with each exchange even if it’s only in an intermediary’s hand for a moment. Why not? If corporations are people, why can’t a human be a corporation?
imo we do things so backwards. Things like stock options when earned should be treated as literal income. Immediately throw all the wealthy executives into the highest tax bracket since they are making that much money, factually. Money in stocks may not be spent yet, just like money sitting in a savings account may not be spent yet. At the end of the day it’s still money.
Oh… and 401k contributions shouldn’t have a higher employer contribution cap. Why I can only put in 20k or so while businesses can add 50k to the execs 401ks on top of their 20k is absolutely maddening.
I know most of what i’m saying is ignoring a myriad of factors but the whole system is rigged against those who don’t have shitloads of money already and can’t take advantage of all the schemes the wealthy have invented over the years.
Anyway, I know all i’m saying is a pipe dream and will never happen. We just have to go back to eating our shit sandwich in the back of the bus.
In the US tax system, which is the only one I’m familiar with, instead of accounting for survival expenses the way businesses do, individuals get the Standard Deduction, with additional allowances for dependents. This is a substitute for having to account for every penny spent on food, rent, etc. For example this year the Standard Deduction is $15,000. Seems a little low to me, and I don’t know how they come up with that number - maybe it’s what they define as the “poverty line” I dunno. But that’s the concept. If you live better than you would on that much, the additional is your “little getaway” you don’t get to call an expense. Now I’m not disagreeing with you saying the system is rigged in favor of the rich, just clarifying that one particular point.
the standard deduction doesn’t work on a national level. The cost to survive in boston is not the same as rural louisiana.
Everything is designed to maximize taxes on the poor and working class, especially the new tariff tax plan.
That being said… the ‘little getaway’ is easily classified as a business expense in a business. “I traveled to meet with a client” - maybe my getaway was to interview with a potential employer. I can make up bullshit all day and nobody can prove it one way or another.
I’ve personally seen multiple CFOs do illegal shit like embezzlement. I’ve seen internal audit things swept under the rug like fucking crazy.
On the small business side there’s all the blue collar workers gladly taking cash without receipts and never recording it as income. Props up the ‘business’ owners, hurts the working class unless they do side gigs for cash. It’s all broken.
Hence my last sentence, which probably should have been the first since it’s freaking social media.
Government contracts
…and where did the Government get money from, in order to fund such contracts?
The simplest solution would be to mandate that when taking out a loan against shares (a commonly used loophole), it is treated as a Capital Gains Tax event.
At that time the simplest solution was to sell war bonds, which are essentially loans from the public. In the years following the war people cashed in their bonds and earned interest. To pay that, the government used new tax revenue people paid on their salaries, which were higher because business was booming with everybody buying more stuff. The economy spiraled up until the late 1950s when wartime savings finally ran out. At that point the boom should have ended, but the business world didn’t want that so they started handing out consumer credit like candy. The public, also not wanting to end their spending spree, happily took them up on it. Credit spending became an ingrained habit, and now the average American family maintains several monthly salaries worth of credit card debt.
Anyone that thinks these fascists running the country want to go back to the 1950s hasn’t been paying attention. They want to go back to 1850s, when women and minorities were second class citizens or not citizens at all and white Anglo Saxon Christian men ran everything.
They want to go back to a past that doesn’t exist except in their minds.
And the highest rate of union membership in US history.
Go to Iceland if you want the good working conditions!
That’s cool, maybe we should try to bring good working conditions to where we already are, though.
Ronald Reagon and his trickle-down economics.
Yes, but don’t forget that liberals had many many chances to undo the damage Republicans did but they never would. Why? Because liberals are capitalists and capitalist politicians ultimately serve the capital class first and foremost
That’s right folks, if you want prosperity, eat the fuckin rich
And the 50s were a horrible time for women!!
How’d we get there at the time? Was it public political will? The need to fund the world wars? Did we always have high rates and only in the last few decades back off from that being the norm?
We had high tax rates which is entirely unrelated to the prosperity of the 1950s which was based on the USA comprising 50% of the world economy.
We cut the rates in 1983 and took in more revenue overall which indicates that a top marginal rate can be set high enough to encourage tax fraud, tax evasion, and tax avoidance. This is what Laffer suggested at a cocktail party and is now known as “The Laffer Curve”
They said, posting on threads and supporting said billionaires prosperity.
post it to fedi and you’re preaching to the choir
Except that is entirely incorrect? It is almost solely because the USA was 50% of the world economy at the time. Restoring the top marginal tax rate to 91% will not return us to prosperity
I say let’s try anyway
agreed. taxing the ultra rich is the only legal method available to the 99% to redistribute wealth back down the masses who have been systematically robbed and exploited and manipulated by oligarchs. who cares if revenues go up or down? either we tax the robber barons or we seize their assets… or our kids and grandkids will be destitute.
It was a bit of a one-off because Europe was in rubble post war and lots of money flowed to the US.
