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I love how when people talk about making America Great Again they are generally talking about a time where the highest marginal tax rate was like 70% (of course

I love how when people talk about making America Great Again they are generally talking about a time where the highest marginal tax rate was like 70% (of course no one paid that but people don't pay the top rate now either). I would love to bring that piece of history back. I love America and have benefitted a lot from it, I'm happy to pay more for my fellow Americans (which I do now via some donations but I need to do more)

rayiner 2y ago
People pay much more of the theoretical top rate today than they did of the higher top rate back then. Federal tax revenues as a percentage of GDP has been basically flat since 1950: https://fred.stlouisfed.org/series/FYFRGDA188S https://fred.stlouisfed.org/series/FYFRGDA188S.
- tdb7893 2y ago
  Interesting, thanks for the info. Though I wish it could be broken down based on income brackets but I can't find that.
  - rayiner 2y ago
    https://taxfoundation.org/data/all/federal/us-income-growth-progressive-tax-code/ https://taxfoundation.org/data/all/federal/us-income-growth-... “Contrary to common perceptions, the CBO data indicate that: (1) income earned after taxes and transfers has increased over the past several decades for all income groups, (2) the federal tax system is progressive and has become more progressive over the past three decades, and (3) the federal system relies heavily on higher earners to raise revenue for government services and means-tested transfers.” https://www.forbes.com/sites/timworstall/2015/01/08/the-us-tax-system-just-keeps-on-getting-more-and-more-progressive/ https://www.forbes.com/sites/timworstall/2015/01/08/the-us-t... I can’t find data before 1980.
    - woooooo 2y ago
      "Three decades" is doing a lot of work there. Reagan?
      - rayiner 2y ago
        The data starts at 1979, before Reagan’s major tax reform in 1986: “In contrast, the effective federal tax rate for the top 1 percent has remained relatively high over this period, ranging between 25 and 35 percent since 1979.” Reagan’s tax reform wasn’t a gimmick: it broadened the tax base (to encompass more kinds of income) and lowered rate to keep the effective tax rate basically the same. The biggest problem is we simply doesn’t tax enough. We want to grow the scope of our government to be more like Europe, but we aren’t willing to tax the middle and upper middle class the way they do in Europe. We had an au pair from Germany. Our effective tax rate in a blue state as a dual income professional couple was the same as she paid at her entry level office job.
        woooooo 2y ago
        Reagan did 3 big tax bills, 81 tax cut, 83 social security and the 86 reforms you're referencing. You're right that the 86 reform was pretty progressive but with all 3, the rich did great, poor did alright and middle class did poorly, IMO.
        rayiner 2y ago
        According to the data, the share of federal taxes paid by the top 1% increased from about 15% in 1979 to 25% in 2019, while the share paid by the bottom 20% decreased from about 20% to 15%.
        woooooo 2y ago
        That's absolute dollars right? As in, they're paying more total dollars in income tax, despite a lower tax rate, because they're making so much more compared to 79? (Income inequality has steadily gone up). What was their effective rate in those years? What percentage of their income are they paying compared to the nonrich, and how did it trend?
- katbyte 2y ago
  What does that have to do with ”how much of their income/wealth as a % of their total do the ultra rich pay nothing vs 50 years ago” As they paid less everyone else could just be paying more as a total

rayiner 2y ago

People pay much more of the theoretical top rate today than they did of the higher top rate back then. Federal tax revenues as a percentage of GDP has been basically flat since 1950: https://fred.stlouisfed.org/series/FYFRGDA188S https://fred.stlouisfed.org/series/FYFRGDA188S.

tdb7893 2y ago
Interesting, thanks for the info. Though I wish it could be broken down based on income brackets but I can't find that.
- rayiner 2y ago
  https://taxfoundation.org/data/all/federal/us-income-growth-progressive-tax-code/ https://taxfoundation.org/data/all/federal/us-income-growth-... “Contrary to common perceptions, the CBO data indicate that: (1) income earned after taxes and transfers has increased over the past several decades for all income groups, (2) the federal tax system is progressive and has become more progressive over the past three decades, and (3) the federal system relies heavily on higher earners to raise revenue for government services and means-tested transfers.” https://www.forbes.com/sites/timworstall/2015/01/08/the-us-tax-system-just-keeps-on-getting-more-and-more-progressive/ https://www.forbes.com/sites/timworstall/2015/01/08/the-us-t... I can’t find data before 1980.
  - woooooo 2y ago
    "Three decades" is doing a lot of work there. Reagan?
    - rayiner 2y ago
      The data starts at 1979, before Reagan’s major tax reform in 1986: “In contrast, the effective federal tax rate for the top 1 percent has remained relatively high over this period, ranging between 25 and 35 percent since 1979.” Reagan’s tax reform wasn’t a gimmick: it broadened the tax base (to encompass more kinds of income) and lowered rate to keep the effective tax rate basically the same. The biggest problem is we simply doesn’t tax enough. We want to grow the scope of our government to be more like Europe, but we aren’t willing to tax the middle and upper middle class the way they do in Europe. We had an au pair from Germany. Our effective tax rate in a blue state as a dual income professional couple was the same as she paid at her entry level office job.
      - woooooo 2y ago
        Reagan did 3 big tax bills, 81 tax cut, 83 social security and the 86 reforms you're referencing. You're right that the 86 reform was pretty progressive but with all 3, the rich did great, poor did alright and middle class did poorly, IMO.
        rayiner 2y ago
        According to the data, the share of federal taxes paid by the top 1% increased from about 15% in 1979 to 25% in 2019, while the share paid by the bottom 20% decreased from about 20% to 15%.
        woooooo 2y ago
        That's absolute dollars right? As in, they're paying more total dollars in income tax, despite a lower tax rate, because they're making so much more compared to 79? (Income inequality has steadily gone up). What was their effective rate in those years? What percentage of their income are they paying compared to the nonrich, and how did it trend?
katbyte 2y ago
What does that have to do with ”how much of their income/wealth as a % of their total do the ultra rich pay nothing vs 50 years ago” As they paid less everyone else could just be paying more as a total