Today, there was a big hubbub about Barack Obama's statements regarding Ronald Reagan. Personally, I think there's no need to rehash the many reasons they were fair and understandable, nor to harp on where it comes up short, as about 1000 diaries today have already done.
(Full Disclosure: I'm an Obama Supporter)
But today, I want to talk about what every single candidate for the Democratic nomination has in common with Ronald Reagan.
Tax Policy.
Follow me below the fold for an explanation. Because if we're ever going to win elections again, this is vital information.
It is often easy to forget, or perhaps even to go through life without knowing, how progressive the tax code was upon conception of a progressive income tax. For posterity's sake, let's take a look at how the progressive income tax started.
In 1913, before the income tax became a considerable part of our revenue (which it's still really not all that much), the bottom tax bracket was 1% and the top was 7%.
By 1917, the bottom rate was 2%, the top rate 67%.
At the height of progressivity in our tax code, the brackets and percentages were as follows:
Income level |
Tax rate |
---|
up to $2,000.00 | 20% |
$2,000.01 - $4,000.00 | 22% |
$4,000.01 - $6,000.00 | 26% |
$6,000.01 - $8,000.00 | 30% |
$8,000.01 - $10,000.00 | 34% |
$10,000.01 - $12,000.00 | 38% |
$12,000.01 - $14,000.00 | 43% |
$14,000.01 - $16,000.00 | 47% |
$16,000.01 - $18,000.00 | 50% |
$18,000.01 - $20,000.00 | 53% |
$20,000.01 - $22,000.00 | 56% |
$22,000.01 - $26,000.00 | 59% |
$26,000.01 - $32,000.00 | 62% |
$32,000.01 - $38,000.00 | 65% |
$38,000.01 - $44,000.00 | 69% |
$44,000.01 - $50,000.00 | 72% |
$50,000.01 - $60,000.00 | 75% |
$60,000.01 - $70,000.00 | 78% |
$70,000.01 - $80,000.00 | 81% |
$80,000.01 - $90,000.00 | 84% |
$90,000.01 - $100,000.00 | 87% |
$100,000.01 - $150,000.00 | 89% |
$150,000.01 - $ 200,000.00 | 90% |
$200,000.01 or more | 91% |
http://en.wikipedia.org/...
For reference, the current income tax brackets (2008) are as follows:
Marginal Tax Rate |
Single |
Married Filing Jointly or Qualified Widow(er) |
Married Filing Separately |
Head of Household |
---|
10% | $0 – $8,025 | $0 – $16,050 | $0 – $8,025 | $0 – $11,450 |
---|
15% | $8,026 – $32,550 | $16,051 – $65,100 | $8,026 – $32,550 | $11,451 – $43,650 |
---|
25% | $32,551 – $78,850 | $65,101 – $131,450 | $32,551 – $65,725 | $43,651 – $112,650 |
---|
28% | $78,851 – $164,550 | $131,451 – $200,300 | $65,726 – $100,150 | $112,651 – $182,400 |
---|
33% | $164,551 – $357,700 | $200,301 – $357,700 | $100,151 – $178,850 | $182,401 – $357,700 |
---|
35% | $357,701+ | $357,701+ | $178,851+ | $357,701+ |
---|
http://en.wikipedia.org/...
Ronald Reagan was President from 1981 to 1989. Between 1981 and 1989, the top tax percentage went from 70% to 33%. The bottom bracket went from 14% to 15%.
THAT is the true enduring legacy of Ronald Reagan. With that single move, he took away the middle class from the Democrats for a generation. Because for so long as our top tax bracket is not only so low in terms of percentage, but also in terms of top tax bracket, setting it back compared to inflation by at least a generation, the middle class will not believe us when we say that we want to tax the rich. $400,000 a year, while a very nice salary, is not rich. And the very rich have many more ways to evade taxes. So to tax someone who makes $5 billion as much as someone who makes $400,000 a year and call that taxing the rich, is, frankly, laughable.
The simple fact of the matter is, that in 1941 there was a top tax bracket of $5,000,000. By 1981, the top tax bracket was $215,400. By the time Ronald Reagan left office, the top tax bracket was $30,950. Practically a flat tax.
http://www.truthandpolitics.org/...
The truth is, we can be the party of the middle class again. We can win a supermajority and take back our country. But not until a politician finds the guts to fix our income taxes. Because, rightfully so, someone who makes $200,000 doesn't feel like they should be paying the same tax rate as someone who makes $5 billion.
Let's get serious about a progressive income tax again. With that policy, we will be truly unstoppable.
I realize there are problems with the estate tax, corporate tax, and capital gains tax which are important for making tax policy more fair overall. This particular diary was intended to focus solely on the income tax. The others will be a diary for another day.