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I've heard a number of people (Grover Norquist included) make the claim that although the top marginal tax rates were higher, there were a far greater number of

I've heard a number of people (Grover Norquist included) make the claim that although the top marginal tax rates were higher, there were a far greater number of tax exemptions available. I have no idea how true this is, and I'm not aware of anyone who's studied the actual income, wealth, and taxes of America's rich over the decades.

viggity 14y ago
Agreed, looking at top marginal rate seems weird, why not look at effective tax rates for the Top 1, 5 and 10% instead?
- nikcub 14y ago
  because it doesn't give you the answer you want
  - muhfuhkuh 14y ago
    What answer would that be? Because looking here[1], the effective tax rate during our largest job growth (Clinton Administration) was also when we saw the largest effective tax rates for the 10, 5, and 1%. I guess I have to correlate until we run out of data, then checkmate or something. [1] http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=456 http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...
    - nikcub 14y ago
      this debate is so complicated that you can easily take data to support any side of the argument for eg. the effective rates don't match up for the 80s but they do for the 90s. they also don't take into account capital gains, which is what most of the top 5, 1% etc. pay then if I was arguing the other side of the debat I would say that this data hasn't been normalized for purchasing power etc. etc. ad nauseam
MaysonL 14y ago
BS.
aliston 14y ago
In addition, the point at which the top tax rate kicks in has varied quite a bit throughout the 1900's. For instance, in the 1950's, when we had a top marginal tax rates over 90%, the top bracket also kicked in at 400k, which would be nearly 4 million in todays dollars. That's why merely looking at the top marginal rate is kind of misleading. http://ntu.org/tax-basics/history-of-federal-individual-1.html http://ntu.org/tax-basics/history-of-federal-individual-1.ht...
- sukuriant 14y ago
  90% of the top bracket..? That seems like honest robbery to me, like saying "I'm sorry. You're not allowed to make a lot of money. The government needs this money."
  - bsphil 14y ago
    Only if you think people paid all of it without writing anything off.
    - sukuriant 14y ago
      Why should it be possible to write it all off? These systems seem to be completely in disagreement with each other? Why not keep it less than 50%, just make it harder to write things off O.o
      - redthrowaway 14y ago
        Because, in liberal (small-l, read: the West) democracies, the notion that taxation policy should be used to encourage productive behaviours and discourage unproductive ones is deeply-enshrined. Thus do we give tax breaks to people who start companies, create jobs, or invest in same, and further penalize with a luxury tax those who just go and buy a big fuck-off yacht. We give tax breaks to local farmers, but tax cigarettes and booze. If we had the kind of tax structure you propose, we'd equally reward those who invest their money in growing companies, and those who blow it on hookers and blow. Some libertarians would claim this as a just tax system, and that the free market would determine how and where people invest, but this is not an idea that has much purchase among economists, social scientists, or the political elite.
Florin_Andrei 14y ago
Asking Grover Norquist for advice on economics is like asking Pat Robertson to explain what causes hurricanes and earthquakes (hint: he says it's something about the sexual orientation of some people).

viggity 14y ago

Agreed, looking at top marginal rate seems weird, why not look at effective tax rates for the Top 1, 5 and 10% instead?

nikcub 14y ago
because it doesn't give you the answer you want
- muhfuhkuh 14y ago
  What answer would that be? Because looking here[1], the effective tax rate during our largest job growth (Clinton Administration) was also when we saw the largest effective tax rates for the 10, 5, and 1%. I guess I have to correlate until we run out of data, then checkmate or something. [1] http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=456 http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...
  - nikcub 14y ago
    this debate is so complicated that you can easily take data to support any side of the argument for eg. the effective rates don't match up for the 80s but they do for the 90s. they also don't take into account capital gains, which is what most of the top 5, 1% etc. pay then if I was arguing the other side of the debat I would say that this data hasn't been normalized for purchasing power etc. etc. ad nauseam

MaysonL 14y ago

BS.

aliston 14y ago

In addition, the point at which the top tax rate kicks in has varied quite a bit throughout the 1900's. For instance, in the 1950's, when we had a top marginal tax rates over 90%, the top bracket also kicked in at 400k, which would be nearly 4 million in todays dollars. That's why merely looking at the top marginal rate is kind of misleading. http://ntu.org/tax-basics/history-of-federal-individual-1.html http://ntu.org/tax-basics/history-of-federal-individual-1.ht...

sukuriant 14y ago
90% of the top bracket..? That seems like honest robbery to me, like saying "I'm sorry. You're not allowed to make a lot of money. The government needs this money."
- bsphil 14y ago
  Only if you think people paid all of it without writing anything off.
  - sukuriant 14y ago
    Why should it be possible to write it all off? These systems seem to be completely in disagreement with each other? Why not keep it less than 50%, just make it harder to write things off O.o
    - redthrowaway 14y ago
      Because, in liberal (small-l, read: the West) democracies, the notion that taxation policy should be used to encourage productive behaviours and discourage unproductive ones is deeply-enshrined. Thus do we give tax breaks to people who start companies, create jobs, or invest in same, and further penalize with a luxury tax those who just go and buy a big fuck-off yacht. We give tax breaks to local farmers, but tax cigarettes and booze. If we had the kind of tax structure you propose, we'd equally reward those who invest their money in growing companies, and those who blow it on hookers and blow. Some libertarians would claim this as a just tax system, and that the free market would determine how and where people invest, but this is not an idea that has much purchase among economists, social scientists, or the political elite.

Florin_Andrei 14y ago

Asking Grover Norquist for advice on economics is like asking Pat Robertson to explain what causes hurricanes and earthquakes (hint: he says it's something about the sexual orientation of some people).