Skip to main content

This is cross-posted at www.StewartAcuff.com

"Our Federal income tax system protects the super-rich on an increasingly grand scale. The current maximum federal income tax rate is 35%. Most of the very rich pay a lower rate on much of their income. Stock dividends are treated as capital gains and are, therefore, taxed at less than half the regular rate. As a result, someone like Warren Buffet sometimes pays a smaller percentage of his income as Federal taxes than do many of the people working in his offices.

It hasn't always been this way. During the heyday of the middle class, Federal income tax rates were many times higher. When President Reagan took office, the maximum Federal tax rate was 70%. Even that was low compared to the 91% top rate during the 1950's. In fact, the last time our maximum Federal tax rate was as low as it is now was... during the run-up to the [Great] Depression. During those years, the maximum rate was 25%."

- An excerpt from Getting America Back to Work, coauthored by Dr. Richard Levins and Stewart Acuff.

Click here to buy the book now.

---

Stewart Acuff is America’s best-known and foremost labor organizer. He is the former organizing Director of the AFL-CIO. Acuff has also written two books: Playing Bigger Than You Are: A Life in Organizing, and Getting America Back to Work, coauthored by Dr. Richard Levins.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  Please don't adopt the falsehood (3+ / 0-)
    Recommended by:
    Roger Fox, johnny wurster, nextstep

    that looking at top marginal rates alone tells you something about what people pay in federal income taxes.  From your diary:

    It hasn't always been this way. During the heyday of the middle class, Federal income tax rates were many times higher. When President Reagan took office, the maximum Federal tax rate was 70%. Even that was low compared to the 91% top rate during the 1950's. In fact, the last time our maximum Federal tax rate was as low as it is now was... during the run-up to the [Great] Depression. During those years, the maximum rate was 25%
    Your excerpt mentions the top marginal rate of 70% before Reagan took office as if that were an indication of when the rich paid much more in federal income taxes.  Ironically, the rich paid MORE in federal income taxes under Clinton's 39.6% top marginal rate than they did under that 70% rate.  You need to look at EFFECTIVE federal individual income tax rates -- see, for example, the SECOND chart here.  It has to do with lots of things like the exemptions/deductions available (the Tax Reform Act of 1986 eliminated a lot of those), where -- in terms of income levels -- the rates change, etc.  

    It's a complete falsehood, for example, to say that "we want to go back to the tax system before Reagan so the rich pay more."  If you want the rich to pay the most they've paid since the CBO began keeping score in 1979, you want to go back to Clinton's tax system.  You can't "go back" to Reagan or Eisenhower unless you repeal the Tax Reform Act of 1986 and put back in all those exemptions, deductions, and shelters.  

    I always get irritated by these diaries that promote the simplistic -- and false -- notion that you just have to look at top marginal rates to see what "the rich" are paying in taxes.  

    •  Comparing statutory and effective rates (0+ / 0-)

      allows for a potentially larger insight.

      This has always brought me to the question, "boy they sure got rid of a lot good deductions that encouraged domestic investment, didnt they?" Along with old or bad deductions too....

      Statutory and effective
      1980
      70%-22.3%

      2007
      35%- 19%

      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 Thu Jun 14, 2012 at 10:35:11 AM PDT

      [ Parent ]

      •  I agree that the comparison allows for (1+ / 0-)
        Recommended by:
        Roger Fox

        a discussion of those things that go into an effective rate, such as shelters, deductions, exemptions, where the rates start.  

        What I disagree with is -- as this diary did in the part I quote -- to simply compare top marginal rates as if that give you an indication of when the rich paid mor.  

        In your list, you should also include the HIGHEST effective rate since the CBO began keeping score:

        2000
        39.6% -- 24.2%

        •  Still shows effectives rates dont move much (0+ / 0-)

          though in reality theres a big difference in revenues between 19% and 24.2%.

          Sidebar

          I went to a forum to see Dr Krugman over the winter, IIRC he said he didnt think effective income tax rates were ever more than 39%, I assume he was refering to 1945 @ 94%.

          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 Thu Jun 14, 2012 at 03:42:52 PM PDT

          [ Parent ]

          •  I've never seen a realistic (1+ / 0-)
            Recommended by:
            Roger Fox

            and defensible calculation of the effective tax rates at various income levels for the 50's -- CBO data doesn't go back that far.  And that 39% -- if it's accurate -- I suspect was for something like the top .001% at the time, rather than the top 1%.  

    •  why? (0+ / 0-)

      effective taxation is currently the lowest since undertaxation caused the first Republican Great Depression.  Just tax them.

      all morals are relative, but some are more relative than others.

      by happymisanthropy on Thu Jun 14, 2012 at 11:59:13 AM PDT

      [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site