This is warfare my friends, the Aristocracy has attacked us, and we must defend ourselves.

[FogerRox]

Tax Rates & the Middle Class

At a recent meeting of progressives in NJ, a fellow progressive professed astonishment when I told him the top tax rate used to be 92%, in fact he did not believe me. This incident motivated me to get my ducks in a row and the result is what you see below.

A Middle class is a rare thing, occurring only 3 times thru-out history. The first rising of a middle class occurred as a result of the Black Plague. The Black Plague killed about 30% of the worlds population, creating a labor shortage. This allowed that Trades & Craftsman to command a higher wage, which trickled down to the common yeoman, much as the unionization of US labor in the middle 1900's allowed non union labor to command wages akin to union labor. Some have written that the renaissance, without a middle class that had the liesure time to even consider art & music, let alone the time to paint, sculpt, write & perform music, would have never occurred.

>snip<

Enter Ronald Reagan and the start of full spectrum warfare on the middle class. The opening salvo, the PATCO strike. Busting the Air Traffic Controllers union was the start of a multi front military style operation to drive wages down for all americans. Then we were told that Social Security was going broke, this represents the opening of a second front of the War on the Middle Class that resulted in the doubling of payroll taxes.

>snip<

This is warfare my friends, the Aristocracy has attacked us, and we must defend ourselves.

Read the complete blog here:

http://rdanafox.blogspot.com/2006/11/tax-rates-middle-class.html

[orpupilofnature57]

1. Impeachment is the only way this Robbery will stop . n/t

[Cleita]

2. I remember the 90% tax rate. It was the very first time I had

to file taxes and I was shocked when I looked at the tax brackets. However, with all the loopholes, I doubt if anyone every paid the full amount.

[Vickers]

3. Therein lies the fallacy of their "argument"...nobody ever, EVER paid 90%.

If they say they did, they are a lying sack of basement-dwelling, t-shirt-staining, freeper horseshit.

[Newsjock]

6. 92%-93% was only the top marginal rate

on that portion of the income over a very large amount. The effective rate was much lower, but yes, truly obscene income was taxed truly obscenely. Seems like a good idea for the 21st century.

[FogerRox]

9. DAymn, when I was born, it was 92% but soon got dropped to 86%

You must be REAL OLD, LOL, at least older than I am.

[FogerRox]

36. @ 92 %, a person might have paid 86% or so. Or so I have been told.

[davekriss]

45. In fact we had a net flat tax post-war right in to the seventies

I don't have an on-line cite, but if you have access to Michael Harrington's The Twilight of Capitalism he demonstrates that when we had marginal tax rates from 70% to 90%, we collected approximately 35% (aggregate of all taxes) across the income spectrum, with marginal exception for those with very low incomes and very high incomes, where close to 38% was paid. Thus the progressive federal income tax countered various regressive taxes yielding in effect nearly flat taxation for all.

My big concern when Reagan reduced marginal rates down to 28% was that the netted flatness would tilt markedly in favor of the top income tiers, and that's exactly what happened. Look at the numbers: The net gain in wealth from 1980 to 1988 for the top 10% pretty much matches the debt added during that period, while gains for the bottom 90% were negligible to negative (for a cite, see Benjamin Friedman's Day of Reckoning and Kevin Phillips' Boiling Point -- apologies that I don't retrieve tables and page numbers now).

The middle class as we've come to expect it, very much a historical abberation, was birthed in WWII hyper demand for U.S. goods and services and lived on to about 1973 (with the first oil embargo). We had some of the highest marginal tax rates in U.S. history then. On the flip side, marginal FIT was reduced to 25% right before the economy collapsed into the Great Depression.

On edit: On my first cite (of Michael Harrington) to support the net flat tax stat, I just took a look (and now am sneezing as I haven't opened the book in some time!) and I can't find the chart I recall above. It must be from some other work. However, boy, I sure wish we still had the inequality in wealth and income Michael outlines! 30 years hence the top tier nearly doubles their advantaged position relative to the rest of us!

[WCGreen]

52. It's the marginal rate....

On income after a certain level, the next dollar is taxed at that rate...

[Jackpine Radical]

4. A beautiful job, Roger.

I bookmarked your blog & will push as many people toward it as I can.

[FogerRox]

8. Thanks, Jackpine Radical, I did try, Really... I did...... LOL

[FogerRox]

5. We need to return to a truly progressive tax system

[orpupilofnature57]

7. Al Gore?

[FogerRox]

10. Um good input, NOW > > > > WTF are you talking about, HUH ?

[orpupilofnature57]

32. UMMM

http://en.wikipedia.org/wiki/Al_Gore#Gore_bill

[FogerRox]

35. the 3 pillars holding up the middle class. Progressive taxes, labor & education.

Can you tie in your link to one of these 3 topics?

[orpupilofnature57]

37. Education

[FogerRox]

40. Please continue.....

[orpupilofnature57]

44. O.K. How about this??

http://en.wikipedia.org/wiki/Generation_Investment_Management

[FogerRox]

46. C+, low effort, on what maybe a good idea, if you coul dtalk about it.

GI bill like it was for my Dad, free college for 4 yrs. Make Public school the equivalent of K thru 13, just in the same span of K-12.

92% top tax rate, ie, make it progressive. Drop SS tax to 7%, no cap on SS.

Thom Hartman says

"But, unless we repeal Taft-Hartley; start enforcing the Sherman act, provide free education for Americans (and not just Iraqis); abandon WTO/GATT and NAFTA; restore progressive taxation (including on dividend income); force corporations to pay their fair share; and go back to selective tariffs to protect domestic industries and stop offshoring to explicitly bring home the ability for us to make our own clothes, furniture, autos, and electronics, the conservatives will have won and the middle class -- and, thus, democracy -- will lose. "

http://www.commondreams.org/views04/0618-03.htm

[orpupilofnature57]

48. That Hartman story was great , Thanks

I'm sorry I find myself interjecting Impeachment! and Al Gore for the last 2 wks though I do think Al Gore is the only politician with guts and foresight to do what is right for working America.Impeachment should be Plausible on Shrubs tax policies alone ,but thats just me wanting blood for my tomahawk,I'll shut up now.

[FogerRox]

49. Well damnit, make your case, dont shut up

You want to drop a few links and tread lightly, AHHH fooey on you. Please consider yourslef invited in to the party, wade in with a big stick and start swinging. I am a bit of a fan of Gore myself.

[War Pigs]

11. All draft dodgers who make $30 million a year for 3 hours a day

should pay the 90% IMO.:bounce:

[FogerRox]

14. Bingo, thats a Progressive tax. War Pig.

[StClone]

12. Kevin Phillip's book "Wealth and Democracy"

Is an outstanding resource on historic concentrations of wealth and its detrimental effects. Adjusted tax rates were as high as 60 to 70 % as I recall but JFK gave a tax break that became the start of the slide.


http://ec1.images-amazon.com/images/P/0767905342.01._BO2,204,203,200_PIsitb-dp-500-arrow,TopRight,45,-64_AA240_SH20_OU01_SCLZZZZZZZ_.jpg

http://www.amazon.com/Wealth-Democracy-Political-History-American/dp/0767905342

[FogerRox]

15. If you read one book on this issue, read Kevin Phillips

[followthemoney]

22. I borrowed the book from the library and liked it so much I bought my own.

[FogerRox]

34. I read "Weealth" and "Am. Dynasty" by Phillips, then saw Dynasty on sale @ Borders

for $5, I bought 7 copies, they became X-mas presents.

[followthemoney]

38. I salute you for efforts to educate Americans. That is a Great idea.

[FogerRox]

39. He he he, I thought I was getting presents cheap..........

[followthemoney]

41. High value presents at a low and affordable price.

[FogerRox]

43. Yeah thats it, yeah, I'm a, ah , ah, ah, GENIUS, yeah, thats right.......

[proud patriot]

13. As a struggling/poor working American I say

We really need to do something about this .

[FogerRox]

16. Great piece by Thom Hartman I quoted from

http://www.commondreams.org/views04/0618-03.htm

[proud patriot]

18. that's a keeper

:)

[kpete]

17. Happy to be #5

[FogerRox]

19. Kpete, you can be my wingman anyday.... LOL, thanks

[bleever]

20. This is a GREAT post about a slow fundamental shift in

American governance with disastrous effects.

I am embarrassed that I wasn't aware of the connection between the rise of the guilds and trade unions and the toll the plague took.

We may be on the verge of a resurgence of Populism, in which institutions exist to serve people (again), and not vice versa.

:thumbsup::thumbsup::thumbsup:

[FogerRox]

21. Kevin Phillips book "Wealth & Democracy" is the single book that

shines on this topic, though Thom Hartman www.thomhartmann.com. is always right on when it comes to warfare on the middle class.

[autorank]

23. K&R...They're a plague on the middle class...

Wal-Mart Nation is the indended effect. It makes no sense, it's their nature to try and influct damage.

K&R

[truedelphi]

24. Foger Rox - It is as though you read my mind

Earlier today - I was thinking and hoping that a rational discussion of the middle class would appear - especially with regards to the middle class and the taxes they (probably you and definitely me) pay.

One of the things that currently afflicts the middle class is that the tax rate tables in terms of income tax rates, have not been touched since long before 1960.

So my dad, who was a decent accountant back in the 1950's, made let's say $ 4,500 a year. Check out that tax break and you see that by the time he deducted for his 2 kids - he paid very little in taxes on his 1040.
This fact enabled him to *always* have at least 1,000 of his income in savings, and *always* take a two week vacation somewhere nice. He also *always* had life ins and health insurance.

When I was growing up My mom worked when she wanted -never making much more than pin money. (She proved later in life to be an astute business person and set up her own successful business - but even that was not out of need.) I feel that if we went With the right taxation table, no child would experience both their parents to be out there working unless both want to.

But nowadays just through inflation a starting accountant is going to be getting 27 K to 35 K in terms of re-imbursement. Back in the 1950's this would have been considered a top of the line income - what a beginning doctor would have received. So the person is taxed accordingly. However, 1950' style rents are no longer available - anyone hear of a $ 90 a month apartment anywhere in the country right now? Houses average $ 200K in many markets.

So Ms or Mr CPA circa 2006 is quite likely laying out 30 per cent or more just for rent (something my dad would have shot himself before doing - he understood economics as well as accounting!) Then the individual will pay 18 per cent to 24 per cent on their income and a hefty 15 per cent or more if they are independently working (to Social security) Or 7.5 per cent (to Soc Security) if they have an employer. So just the roof over the head and taxes including Soc and you are looking at a person receiving only 45 per cent of their income as net income to pay for luxuries such as groceries, car payment, car insurance, gasoline to get back and forth to work, clothes, shoes etc.

THE BIGGEST LOSS THAT THE MIDDLE CLASS HAS SUFFERED OVER THE LAST TWO DECADES IS THE LOSS OF THE MORTGAGE DEDUCTION. If you live in or near New York City, Boston, Los Angeles, San Francisco, etc and you are middle class, you may never own a home. Or one may not come to you until both your parents have died and left you an inheritance (or their home)

We definitely need to offset this mortgage deduction loss somehow.

[FogerRox]

25. Ahem take it back the deduction.... and the country

[More Than A Feeling]

26. Damn aristocracy.

Weren't we supposed to have gotten rid of that mentality in the Revolution?

What's the old saying? "If this is class warfare, the poor are losing."

[FogerRox]

27. aristocracy, oligarchy, lets throw the whole thing out

[More Than A Feeling]

28. We need to encourage people to deal with their fundamental insecurity

by embracing their fellow humans, rather than rushing to get way more than their fair share, and making up illegitimate rationales to get people to give way willingly rather than standing up for themselves.

[mom cat]

33. Amen to that! The new American revolution is forming again and

this will be a key issue. The graphs are stunning!
I have bookmarked this in 4 separate places so I will always be able to find it. K&R ... natrually. This is a core issue that we need to be screaming about!

[Canuckistanian]

29. Right on about the middle class

I commented on it in one of my journal posts:
http://journals.democraticunderground.com/Canuckistanian/4

[earth mom]

30. Yes, it is a Class War...

I've been saying that for awhile now around here, though not as eloquently as you. :thumbsup:

http://www.newdemocracyworld.org/War/London.htm

[dmosh42]

31. I'm in complete agreement!

The people in the working classes are starting to realize that their enemies are not in the middle east or N. Korea, but right here in our very large corporations. These are the enclaves the bluebloods use to manipulate the masses. Through control of the media, by direction and misinformation, have managed to shift the burdens completely to waht was the middle class.

[FogerRox]

42. dmosh42, thanks.

[Strawman]

47. Yeah. It kills me how Kucinich is a "pinko" when Ike's income tax was more progressive

than Kucinich's proposal. Waaay more progressive. That's how far the mainstream consensus has shifted right on taxes. From the rhetoric of the punditocracy, you'd think anyone who advocated rolling back tax cuts for the richest Americans only to what they were under Clinton (39%, I think) was the second coming of Huey Long!

[Blue_Tires]

50. ttt!

[upi402]

51. KICK, 3 cheers for the OP

:toast: :toast: :toast:

[AzDar]

53. Kick! n/t

[alfredo]

54. it is the robber barons that scream class warfare at the first

indication that we are displeased with the state of affairs.