We interrupt your regularly scheduled Friday Evening TGIF festivities....
In 2011 there were 6 tax brackets. 10%, 15%, 25%, 28%, 33%, 35%.
MARRIED FILING JOINTLY
2011 FEDERAL TAX BRACKETS
• Taxable Income:
• $0 - $17,000
10% of the amount over $0
• $17,001 - $69,000
$1,700 plus 15% of the amount over $17,000
• $69,001 - $139,350
$9,500 plus 25% of the amount over $69,000
• $139,351 - $212,300
$27,087.50 plus 28% of the amount over $139,350
• $212,301 - $379,150
$47,513.50 plus 33% of the amount over $212,300
• $379,150 +
$102,574 plus 35% of the amount over $379,150
I just talked to my Mom, she's 78, a Depression baby, she told me my Grandfather had a good job in 1941 in the Quincy Mass Shipyards building cargo ships under the lend lease agreement with the UK.
He was paid 75 cents an hour. About 6 bucks a day or $1500 a year without overtime. My Grandpop probably fit into the bottom tax bracket of 10%, which was zero to $2k. Adjusted to inflation that 2k is about 30k today.
In 1941 there were 32 income tax brackets. 4 brackets for a million and over. 12 brackets for 100k and over.
Today we have 6 brackets that try to describe a progressive geometric curve, in 1941 there 32. Today effective income tax rates are nearly flat. In effect our income taxes are regressive.
We fell prey to the Reagan era, "level the playing field" and "Tax fairness". Its not whats fair, its what creates a stable economy. Infrastructure spending and New Deal Tax Policy that rewarded domestic investment (creating jobs) along with the Glass Steagal bank firewall gave the US a stable economy with short and shallow recessions. And job creation during a recovery from a recession.
By the end of the Reagan era New Deal tax policy was dismantled, the 3 following recessions (1990, 2000, 2008-2012) were deeper and longer. In 1999 Glass Steagal was partially repealed (can you say Mortgage crisis?). Nafta was signed, and the 2000 Commodities and Futures Modernization act codified the Credit Default Swap.
This History flashback was brought to you by Socialists, Liberuls and Democrats. We now return you to your regularly scheduled Friday Evening.