5 ms·

Everybody commenting on this should be familiar with the historic income and capital gains tax rates in the U.S. Here's a chart from 1954-2020: https://www.ta

Everybody commenting on this should be familiar with the historic income and capital gains tax rates in the U.S. Here's a chart from 1954-2020: https://www.taxpolicycenter.org/sites/default/files/styles/original_optimized/public/book_images/3.2.1.1_0.png https://www.taxpolicycenter.org/sites/default/files/styles/o...

da_big_ghey 6y ago
what nice of a cherry-picking graph. it have picked start point of highest rates in history for to make the appearing that there have been some extraordinary cut. but in real seeing it is the high rate that was the extraordinary. here we have longer-view graph for to illustrate: https://taxprof.typepad.com/.a/6a00d8341c4eab53ef01b7c85dc53f970b-800wi https://taxprof.typepad.com/.a/6a00d8341c4eab53ef01b7c85dc53... in similarity, we are see that capital gains tax today still exist above historical past, the graph you link again cherry-pick. longer-term view is showing of a different picture: https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F433057%2Fmaximum-capital-gains-tax-rates.PNG&w=1200&op=resize https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com... under here we are see a recover to normal over time not the "cuts for rich" things you are saying.
- singhrac 6y ago
  I doubt you can compare the American economy of 1850 to that of today... the reason we needed lower taxes before 1920 is because we had a fairly underdeveloped economy. You’re right that it’s best to present the full history, but then you also have to provide context. The period before 1920s was the Gilded Age (then Progressive Era) which was when America was industrializing. I think by “recover to normal over time” you’re making a claim that you’d prefer the economics of 1910 America over 1970 America, which is where we disagree. Sure, if you’re making a founding fathers style argument, it makes sense, but I doubt anyone really wants to go back to a world where America doesn’t have an interstate highway system or Medicare.
ploxiln 6y ago
That's a rather misleading graph though. https://checkyourfact.com/2019/01/09/fact-check-90-percent-taxes-eisenhower-1950s/ https://checkyourfact.com/2019/01/09/fact-check-90-percent-t... > The top 1 percent of income earners paid an average effective income tax rate of 16.9 percent in the 1950s, according to data compiled by the Tax Foundation from a 2017 paper by economics professors. That figure includes all federal, state and local income taxes. > Congressional Research Service calculations of data from the Internal Revenue Service similarly found in a 2012 report that the very top income earners – the top 0.1 percent and 0.01 percent – also paid effective tax rates lower than the 91 percent top marginal tax rate in the 1950s. The average rate for the top 0.1 percent fell from the low 40 percent range to the high 30 percent range during the 1950s. For the top 0.01 percent, it fell from the 50 percent range to the mid-40 percent range.
- kazoomonger 6y ago
  That article is... not informative. It says (paraphrasing) "people didn't pay 91% of their income!" and then just defends that by explaining what a marginal tax system is. Explaining what a marginal tax system is doesn't change the fact that the highest bracket was taxed at 91%. Unless someone is seriously proposing taxing all brackets at 91%, that article is being very misleading, and arguing against a strawman.
  - ploxiln 6y ago
    To be even more explicit: the people with the very highest incomes in the 1950s did not have any significant part of their income fall into the top tax bracket. They did whatever they had to do to not make that happen. They structured it as capital gains and dividends from their businesses, they used deductions for real estate depreciation, etc etc. (To do otherwise would have been insane.) > the 91 percent rate kicked in for each dollar earned over $400,000 – the equivalent of $3,426,776 in constant 2013 dollars So, the top 0.01% (the top 1% of the top 1%) must have made significantly less than $800k ($7 million today) yearly throughout the 1950s in order to pay around 50% total on average each year. I'm sure _some_ of them were executives that would have made a million or two in salary, if the top income bracket was much lower. But instead they had most of their salary turned into benefits and shares or whatever/however it would not be classified "income", and they were successful at this.
makomk 6y ago
So basically, if passed as proposed this would be a higher rate of capital gains tax than at any point in US history?

da_big_ghey 6y ago

what nice of a cherry-picking graph. it have picked start point of highest rates in history for to make the appearing that there have been some extraordinary cut. but in real seeing it is the high rate that was the extraordinary. here we have longer-view graph for to illustrate: https://taxprof.typepad.com/.a/6a00d8341c4eab53ef01b7c85dc53f970b-800wi https://taxprof.typepad.com/.a/6a00d8341c4eab53ef01b7c85dc53... in similarity, we are see that capital gains tax today still exist above historical past, the graph you link again cherry-pick. longer-term view is showing of a different picture: https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F433057%2Fmaximum-capital-gains-tax-rates.PNG&w=1200&op=resize https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com... under here we are see a recover to normal over time not the "cuts for rich" things you are saying.

singhrac 6y ago
I doubt you can compare the American economy of 1850 to that of today... the reason we needed lower taxes before 1920 is because we had a fairly underdeveloped economy. You’re right that it’s best to present the full history, but then you also have to provide context. The period before 1920s was the Gilded Age (then Progressive Era) which was when America was industrializing. I think by “recover to normal over time” you’re making a claim that you’d prefer the economics of 1910 America over 1970 America, which is where we disagree. Sure, if you’re making a founding fathers style argument, it makes sense, but I doubt anyone really wants to go back to a world where America doesn’t have an interstate highway system or Medicare.

ploxiln 6y ago

That's a rather misleading graph though. https://checkyourfact.com/2019/01/09/fact-check-90-percent-taxes-eisenhower-1950s/ https://checkyourfact.com/2019/01/09/fact-check-90-percent-t... > The top 1 percent of income earners paid an average effective income tax rate of 16.9 percent in the 1950s, according to data compiled by the Tax Foundation from a 2017 paper by economics professors. That figure includes all federal, state and local income taxes. > Congressional Research Service calculations of data from the Internal Revenue Service similarly found in a 2012 report that the very top income earners – the top 0.1 percent and 0.01 percent – also paid effective tax rates lower than the 91 percent top marginal tax rate in the 1950s. The average rate for the top 0.1 percent fell from the low 40 percent range to the high 30 percent range during the 1950s. For the top 0.01 percent, it fell from the 50 percent range to the mid-40 percent range.

kazoomonger 6y ago
That article is... not informative. It says (paraphrasing) "people didn't pay 91% of their income!" and then just defends that by explaining what a marginal tax system is. Explaining what a marginal tax system is doesn't change the fact that the highest bracket was taxed at 91%. Unless someone is seriously proposing taxing all brackets at 91%, that article is being very misleading, and arguing against a strawman.
- ploxiln 6y ago
  To be even more explicit: the people with the very highest incomes in the 1950s did not have any significant part of their income fall into the top tax bracket. They did whatever they had to do to not make that happen. They structured it as capital gains and dividends from their businesses, they used deductions for real estate depreciation, etc etc. (To do otherwise would have been insane.) > the 91 percent rate kicked in for each dollar earned over $400,000 – the equivalent of $3,426,776 in constant 2013 dollars So, the top 0.01% (the top 1% of the top 1%) must have made significantly less than $800k ($7 million today) yearly throughout the 1950s in order to pay around 50% total on average each year. I'm sure _some_ of them were executives that would have made a million or two in salary, if the top income bracket was much lower. But instead they had most of their salary turned into benefits and shares or whatever/however it would not be classified "income", and they were successful at this.

makomk 6y ago

So basically, if passed as proposed this would be a higher rate of capital gains tax than at any point in US history?