5 ms·

There never was a 90% tax rate. That was a marginal rate, and there were massive deductions.

by pofilat 8y ago

monocasa 8y ago
Then name those massive deductions. Edit: or just drive by downvote, I guess.
- crooked-v 8y ago
  You should expect people to downvote when you demand information you could get yourself just by skimming Wikipedia articles.
  - monocasa 8y ago
    I asked about deductions, not just the marginal rate. That's not covered in the wikipedia articles.
- pofilat 8y ago
  From the 1950s, when the marginal rate was >90%: https://taxfoundation.org/taxes-rich-1950-not-high/ https://taxfoundation.org/taxes-rich-1950-not-high/ > per the Piketty, Saez, and Zucman data ... The average tax rate on the 0.1 percent highest-income Americans was 50.6 percent in the 1950s, compared to 39.8 percent today. From 1979 onward: http://www.cbo.gov/sites/default/files/cbofiles/attachments/effective_tax_rates2004.pdf http://www.cbo.gov/sites/default/files/cbofiles/attachments/... Highest effective tax rate, before Reagan's reforms, was 37% of the income of the top 1%
  - monocasa 8y ago
    I asked about the deductions, not just the marginal rate. My understanding is it matched what's more typical in Japanese C-levels these days. You don't have a crazy salary, but your car is a company car, the company has a deal with the good schools to cover tuition for your kids, you don't pay for breakfast, or lunch ever because you'd be at the office so the company handles it, etc. Edit: Guys, there's several ways to being down the marginal rate, deductions are only one of them.
- gamblor956 8y ago
  One of the first Google results. https://mises.org/library/good-ol-days-when-tax-rates-were-90-percent https://mises.org/library/good-ol-days-when-tax-rates-were-9... In a nutshell, most expenses that businesses can still deduct were once deductible by individuals, the largest (by dollars) being interest deductions for any type of loan.
  - monocasa 8y ago
    I mean, this is why I don't look to the Mises Institute for real economic analysis. This is blog post is case in point, they base the whole idea of the deductions reducing the marginal rate on one anonymous former accountant, interspersed with bitching about 'liberals'. EDIT: I mean, their charts are blatantly mislabeled (even against their argument), showing a top marginal rate of over 90%. These people are just incompetent.
    - gamblor956 8y ago
      The highest marginal rate was 94% during WWII. So it sounds like the incompetent one is...you... And I'm not citing the Mises Institute for economic analysis, I'm citing it as one of the many dozen potential resources you could have looked at for the historical information you were asking for, namely the deductions that were lost in the 1986 tax reform.
      - deleted 8y ago
        [deleted]

There never was a 90% tax rate. That was a marginal rate, and there were massive deductions.

monocasa 8y ago

Then name those massive deductions. Edit: or just drive by downvote, I guess.

crooked-v 8y ago
You should expect people to downvote when you demand information you could get yourself just by skimming Wikipedia articles.
- monocasa 8y ago
  I asked about deductions, not just the marginal rate. That's not covered in the wikipedia articles.
pofilat 8y ago
From the 1950s, when the marginal rate was >90%: https://taxfoundation.org/taxes-rich-1950-not-high/ https://taxfoundation.org/taxes-rich-1950-not-high/ > per the Piketty, Saez, and Zucman data ... The average tax rate on the 0.1 percent highest-income Americans was 50.6 percent in the 1950s, compared to 39.8 percent today. From 1979 onward: http://www.cbo.gov/sites/default/files/cbofiles/attachments/effective_tax_rates2004.pdf http://www.cbo.gov/sites/default/files/cbofiles/attachments/... Highest effective tax rate, before Reagan's reforms, was 37% of the income of the top 1%
- monocasa 8y ago
  I asked about the deductions, not just the marginal rate. My understanding is it matched what's more typical in Japanese C-levels these days. You don't have a crazy salary, but your car is a company car, the company has a deal with the good schools to cover tuition for your kids, you don't pay for breakfast, or lunch ever because you'd be at the office so the company handles it, etc. Edit: Guys, there's several ways to being down the marginal rate, deductions are only one of them.
gamblor956 8y ago
One of the first Google results. https://mises.org/library/good-ol-days-when-tax-rates-were-90-percent https://mises.org/library/good-ol-days-when-tax-rates-were-9... In a nutshell, most expenses that businesses can still deduct were once deductible by individuals, the largest (by dollars) being interest deductions for any type of loan.
- monocasa 8y ago
  I mean, this is why I don't look to the Mises Institute for real economic analysis. This is blog post is case in point, they base the whole idea of the deductions reducing the marginal rate on one anonymous former accountant, interspersed with bitching about 'liberals'. EDIT: I mean, their charts are blatantly mislabeled (even against their argument), showing a top marginal rate of over 90%. These people are just incompetent.
  - gamblor956 8y ago
    The highest marginal rate was 94% during WWII. So it sounds like the incompetent one is...you... And I'm not citing the Mises Institute for economic analysis, I'm citing it as one of the many dozen potential resources you could have looked at for the historical information you were asking for, namely the deductions that were lost in the 1986 tax reform.
    - deleted 8y ago
      [deleted]