When The Wealthy Paid A 94% Income Tax Over $200,000 - The Good Old Days

[DanieRains]

I have read a few stories about how this was brought about. Here is one. That darn FDR.

https://flaglerlive.com/26685/gc-fdr-and-taxes/

On PBS I heard a historian once say Roosevelt told the Republicans / Wealthy if they didn't accept the tax rate, he wouldn't protect them. I think that did it.....

[FuzzyRabbit]

1. My father had a friend who paid that rate.

And guess what. He still made a ton of money even after taxes.

[BigmanPigman]

2. They are so greedy it is ridiculous.

They could have all the money in the world and it still wouldn't be enough. Sick mentality.

[WyattKansas]

5. What people miss about that rate...

The Wealthy can either pay the rate or reinvest it into their business (expanding/employees/etc), the American People with a charitable/trust foundation or gift for America, or other ways to benefit the country. Which in turn spreads the money around to others in the country and expanding the economy. In other words, it forces the Wealthy to reinvest it in the American People or country while still retaining ownership of it.

That is what tax credits and breaks did prior to the Republican Party using it export jobs and crushing the lower classes even more for decades.

The thing that astonishes me is how many Americans don't know that and think that high rate is unthinkable. As if all the American Icon Trusts and Foundations set up by the Wealthy Elites just naturally bloomed in this country to benefit the American People.

[Kaleva]

3. I think one person occupied the highest tax bracket.

[MichMan]

4. Imagine people like LeBron James going from $39 million to $3.5 million a year

Yet he would still be rich for dribbling a basketball

[WHITT]

8. No

the 94% bracket only applied to incomes above a certain amount, which was 200k back then (about 3 million today). BUT. LeBron's 39 million is gross income, any tax bracket only apples to net income, after deductions, dependents, writeoffs, depreciation, tax credits, and on and on.

[MichMan]

11. So nobody really paid 94% did they?

[roamer65]

6. Hell, I'd be happy just to get back to the 1982 top marginal rate of 50 pct.

Adjusted for inflation of course.

[nitpicker]

7. When income taxes were first introduced, some saw paying them as a status symbol

My great-grandmother's cousin was a car dealer, and he was one of the few people in the county impacted by the 16th Amendment.

[empedocles]

9. Amazing how much FDR accomplished.

[ProfessorGAC]

10. M'eh!

First, FDR was massively popular. Second WW2 was ongoing so quibbling about taxes & debt ceiling was not something the citizenry wanted to hear.
Third, and I think most importantly, from just after WW2 until JFK lowered the top rate, only about 0.5% of people in that tax bracket actually paid that 94%.
When JFK lowered the top marginal rate, dozens of loopholes were closed. The top rate went down, but inflation adjusted revenue was not negatively affected.
So, the 90+% tax rates that people wish for the greed mongers is more of an "on paper" fantasy than actual fact of life.
The reality is that a top rate in the high 40s with ANY & ALL income, directly (actual salary) or tangentially related to compensation (exercised options or dividends on exercised option holdings) would generate $200-250 billion in revenues.
Now, increase LT cap gains & dividend taxation to 27%, and corporate taxes up by 2% and the deficit would be reduced by greater than half.
The 94% isn't needed, especially since it's more mythic than actual.