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View Diary: FDR's Proposed Marginal Tax Rate Was 100% (15 comments)

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  •  could you expand your comment (1+ / 0-)
    Recommended by:
    Roger Fox

    and explain what you mean by statutory and effective?  by effective are you talking about the marginal rate?  Or the total rate on an entire income of, say $30,000 back in 1943?

    www.tapestryofbronze.com

    by chloris creator on Sun Feb 24, 2013 at 03:36:41 PM PST

    [ Parent ]

    •  top marginal/statutory rate in 1945 was 94% (4+ / 0-)

      After shelters, deductions, and exemptions, is the effective rate. I attended a panel discussion in Princeton NJ about a year ago, Paul Krugman was on the panel, he stated he doubted the effective rate on the top marginal rate was never higher than 40%. Data back then was sparse.

      In 1980 the top marginal rate was 70%, the effective rate was 23%. Today its 39.6% and about 21%.

      ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Sun Feb 24, 2013 at 04:15:05 PM PST

      [ Parent ]

      •  but to get more from the richest (0+ / 0-)

        we need to raise the rates.  and close a few loopholes.

        www.tapestryofbronze.com

        by chloris creator on Sun Feb 24, 2013 at 04:17:29 PM PST

        [ Parent ]

        •  Yes and no. 2 ways to go about this (2+ / 0-)
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          Words In Action, Victor Ward

          Pre 1986 TRA there were many shelters, deductions, and exemptions. Post 86TRA most shelters, deductions, and exemptions were removed.

          So if we leave our shelters, deductions, and exemptions the way they are, heres an approximation of what would work:

          add 6 more brackets

          40%-2million
          41%-4million
          42%-8million
          43% 12million
          44%-24million
          45%-48million

          If we bring back the pre 1986 TRA shelters, deductions, and exemptions then this would work out to about the same impact on the top 1%:

          45%-2million
          50%-4million
          55%-8million
          65% 12million
          65%-24million
          70%-48million

          Pre 1986 TRA shelters, deductions, and exemptions,  these loopholes rewarded domestic investment, specifically long term domestic investment, a good hunk of the money was in Manufacturing.

          AS you might guess, after the 1986 TRA, the domestic investment landscape in the US drastically changed, combined with tax breaks for outsourcing, jobs started to leave the US in droves.

          Another thing you might have noticed is that each recession after the 1986 TRA (1990, 2000, 2008-2013) all saw jobless recoveries.

          And what made these recoveries even more jobless was infrastructure spending dropped from 5% of GDP to 1.3%.

          ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Sun Feb 24, 2013 at 04:45:24 PM PST

          [ Parent ]

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