4 ms·

I have a feeling people simply found other ways to be compensated instead of W2 income.

• CamperBob2 1y ago
  That is, in fact, how it worked. Absolutely no one paid 90% income tax or anything close to it. Anyone who remembers how the Reagan tax cuts were sold to the public probably remembers that a key component of the campaign was a commitment to close countless tax loopholes.
• freen 1y ago
  Ah yes, a feeling: even worse than an anecdote. Yes: they reinvested rather than pocketed revenue. Anyway, if did the research, you’d see the effective tax rate for the top income earners in US was 40% back then. Substantially higher than it is today. And that substantially larger portions of revenue were reinvested rather than recognized as profit: high taxes, oddly enough, incentivize investment. Do the math yourself: $1m in profit, 30% tax rate vs 1% tax rate: which rate incentivizes you to reinvest?