Over the past 20 years or so many things in our country have changed and for the worse. The United States budget has been unbalanced for most of the past 20 years. Medicare and Social Security have grown during this time as a large part of the population has gotten older. This has led to the Federal deficit becoming greater and greater. All the while CEO’s have been getting richer and richer. In is not uncommon these days to find 5-10 executives in many companies who make over 1 million per year. The retirement packages for these people start at tens of millions and grow into the hundreds of millions for some. When Dick Grasso who was the president of the NY Stock Exchange retired recently he took away $146 million! Was he worth that? Is anybody?
Meanwhile most Americans have not seen much of an increase in pay over the past 20 years. This is because the cost of healthcare, food, and gas has increased greatly during this time. Now many of these people are losing their jobs and their homes. After dropping during the 1990’s the number of people in Poverty has risen dramatically in the past few years.
What was the cause of these changes? Many were caused by a decline in government programs that have helped many people in the past. So why were these programs eliminated? Because President Reagan cut the tax rates early in his first term and in order to keep the budget from exploding he eliminated many of these programs. So where have tax rates been historically? During most of the past 80 years the Federal Income Tax was a graduated tax. During the period from 1932 to 1981 the tax rate varied between 63% and 92% for the highest wage earners. Then in 1982 after Reagan was elected the tax rate dropped to 50% and in 1988 it dropped to just 28%! After President Clinton was elected the top tax rate rose to 39.6% and then in 2003 under Bush the tax rate dropped to the current 35% rate.
This is why the rich are getting richer and the rest of us are getting poorer. What we need to do is bring back the graduated income tax rates. My tax rates would be as follows:
Tax Rate % Tax Rate %
Wages Single Married
$25,000 - $50,000 10 0
$50,001 - $75,000 15 over $50,001 10 over $50,001
$75,001 - $100,000 20 over $75,001 15 over $75,001
$101,001 - $150,000 25 over $100,001 20 over $100,001
$150,001, - $200,000 35 over $150,001 30 over $150,001
$200,001 - $300,000 45 over $200,001 40 over $200,001
$300,001- $500,000 55 over $300,001 50 over $300,001
$500,001 - $750,000 70 over $500,001 60 over $500,001
$750,001 - $1,000,000 80 over $750,001 70 over $750,001
100,000,001 + 90 over $1,000,001 90 over $1,000,001
I don't know if the rates need to be this high but clearly something has to be done to close the gap between the rich and the poor.