80% tax rate Means prosperity

Im not an american. But from what I learned, the two biggest period of Prosperity in America was between 1896 to 1932 that was dominated by the Republican party and 1980-2012 also dominated by the GOP. In those 2 periods, Tax rates was at their lowest level.

From 1940s to 1980s was a very tought period for America (social riots and few consecutive recesions, Hyperinflations and 3 wars *WW2-Korea and Vietnam*.)




Quote from jueco2005:

I believe everyone knows the 20th century was an American century. The US won 2 world wars, put a man on the moon, invented the automobile, pioneered the atom age, business flourished and the middle class was created.

Between 1940 and 1980 the average tax rate used to be around 80%. We built the interstate highway system, won WWII, fought in Korea, Vietnam and the USSR. These were also the golden years of the now vanishing middle class.

I am writing this thread to remind all of you that real economic growth can happen and its very possible under high tax rates for the RICH. America could not have become an economic and military superpower if we did not tax the rich so much.

Every time I suggest taxing the rich 80% everyone looks at me like if I am some kind of commie; but they open their jaws as big as a Florida alligator when I remind them of the 80% tax rate we used to have from 1940 to 1980.
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Quote from 9999:

This is all fine and dandy, but it doesn't address the causes. Since Italy cannot print its way out of this mess anymore like it used to, now we're suffering. The Euro just brought our problems to the surface, problems that were there way before this currency came.
Tax evasion is indeed a serious issue here, but ppl don't break the law for fun or sports or because we consider it a "high art" like you said. Wanna know why?
-fiscal pressure too high.
Official figures say it's about 45-48%, if I remember correctly. That's bullshit. When you consider everything, it can reach 55% or more.
-public services are very inefficient, compared to the money they get. Justice is extremely inefficient, with civil trials going on for years and years. Imagine having your own shop, customers don't pay you and there's very little - if nothing- you can do about it.
-large areas of the south regions are controlled by organized crime. Need I say more?
-and finally, for our IRS we are guilty before proven innocent. Let's say you have a business. Irs comes to you saying that you owe him money. But you're square, and you can prove it. However, the Irs wants money. So, you either go to court (spending money and considerable time), or you settle for a smaller amount. Nice, eh?
So, I reiterate my point: ppl leave because taxes are too high and also because they're sick and tired to be considered just a lemon to be squeezed. The Euro acted as a catalyst.
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You have my sympathy. Our IRS is known for much the same thing, and state tax authorities (especially if you decide to incorporate and are then subject to corporate tax) are just as wonderfully cooperative.
Curiousity question: was Italy growing faster prior to being in the euro? Just wondering.
 
Quote from trefoil:

You have my sympathy. Our IRS is known for much the same thing, and state tax authorities (especially if you decide to incorporate and are then subject to corporate tax) are just as wonderfully cooperative.
Curiousity question: was Italy growing faster prior to being in the euro? Just wondering.
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you can expect more headaches in the US.
http://www.zerohedge.com/news/guest...rops+to+zero)
 
Quote from trefoil:

You have my sympathy. Our IRS is known for much the same thing, and state tax authorities (especially if you decide to incorporate and are then subject to corporate tax) are just as wonderfully cooperative.
Curiousity question: was Italy growing faster prior to being in the euro? Just wondering.
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I don't have any hard data, but I think so. Maybe the early Euro years were better, can't say since I wasn't here. But right now it looks to me that we're not growing at all.
That doesn't mean I wanna go back to the old Lira, even though things were slightly better.
 
Quote from Messi007:

Im not an american. But from what I learned, the two biggest period of Prosperity in America was between 1896 to 1932 that was dominated by the Republican party and 1980-2012 also dominated by the GOP. In those 2 periods, Tax rates was at their lowest level.

From 1940s to 1980s was a very tought period for America (social riots and few consecutive recesions, Hyperinflations and 3 wars *WW2-Korea and Vietnam*.)
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This is exactly the reverse to the way most people I know remember it. Well, no one was around in the early part of this century, but for the period after WWII, there were two lesser wars, but it was overall a very prosperous period, from the 40s (after WWII) to around 1975. After that came the big inflation (hardly hyper, but it was low double digits for a while), then the most severe recession since the Depression (up until that time, 2008 beat that one out) and then some settling down again, but the main feature since then has been the chronic presence of the "twin deficits": current account and fiscal. I don't think we've run a current account surplus since 1980, and the only surplus in the fiscal accounts was during the dot com boom.
As for the obvious spin about Republicans, you should learn your history a little better. 1896 - 1932? The Great Depression was there for the last three years of that period. It wasn't until 1952 that the US again elected a Republican to be President, and he was very moderate as they go. There was a reason for that.
 
Quote from jueco2005:

This is totally wrong. I could not give any valid to this. Sorry.

These are the same experts that told us "everything is running just fine".

By the way, get your passport and travel please. Maybe it is more expensive for you because we barely have paid vacation but take the time and go!!!
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Totally wrong? By whose measure? Yours? Where is the quote that these people said "everything is just fine?" You're making it up as you go along.

You sound like a disgruntled socialist who would like to see this country head toward a European model which will probably crash and burn within the next 24 months. Frankly, Europe sounds like a better bet for your hypothesis that an 80% tax rate creates prosperity. It will be an easy sell over there. Problem is 80% of nothing is nothing. Except for Germany, productivity is at an all time low. But let's not quibble. After all, socialism looks good on paper - and paper is all you have to sell to the ignorant. The reality of failed governments is merely the 6 o'clock news.
 
Hi again. As I said before, Im not an American, so I can't really speak too much. But from what I learned in school. The 1896-1932 period was the greater economic period for America. By the late 19 century, the US had the largest and most prosperous economy in the world and the Highest living standard too. (I know that the Great D started in 1929) But for almost 48 years (taking into account the Wilson period) The US lived great without too much taxes and a lot economic freedom.

Anyway, Between the 1952 to 2008, The GOP had been in control of the US with 6 US presidents vs 4 Democratic Presidents.

About the Deficits.. This is a very complex topic, because the US has always been in Debt one way or another. The Public Debt under D. Roosevelt reached 110% the GDP.

Im Not saying that the GOP is better than the Dems. My point is that there's no evidence that High Taxes has been good to america. John Kennedy Cut Taxes, Bill Clinton Cut the Effective Tax for the Rich (Capital Gain tax) from 28% to 24%. Reagan Did it and Bush jr did it and the GDP Growth has been Phenomenal. Take a look at Asia. Low tax (Singapur or China. Most Chines use the Hong Kong juridictions to open their business) lot of economic freendom and they have a very Big prosperity and they don't have big debt problems.

In Europe (where I Came from) we had/have ton of taxes and it has been a disgrace for most of the Continent. In fact, Lots of the biggest countries in Europe has been in a "silent" recesion for over the last 3 decades. Go to France or Italy and try to do some Business and you'll see.. BTW, we (in europe ) have very High Tax, and High Debt levels and Low growth for a very long time. (Norway have Big Income tax, but they have more economic freedom than California or Mass States and a most of the Rich people in norway have their jurisdiction in switzerland)

Since the 911, The American Government has become an a very oppressive institution for their People and Mr Obama is making things wrose. I really Like The US and I wish them the Best of the Best. Trully A great and superb Country. But they have to change their current Path!..

Hey, But maybe Im totally wrong on this..

Sorry for my spelling, My english is not very good yet.




Quote from trefoil:

This is exactly the reverse to the way most people I know remember it. Well, no one was around in the early part of this century, but for the period after WWII, there were two lesser wars, but it was overall a very prosperous period, from the 40s (after WWII) to around 1975. After that came the big inflation (hardly hyper, but it was low double digits for a while), then the most severe recession since the Depression (up until that time, 2008 beat that one out) and then some settling down again, but the main feature since then has been the chronic presence of the "twin deficits": current account and fiscal. I don't think we've run a current account surplus since 1980, and the only surplus in the fiscal accounts was during the dot com boom.
As for the obvious spin about Republicans, you should learn your history a little better. 1896 - 1932? The Great Depression was there for the last three years of that period. It wasn't until 1952 that the US again elected a Republican to be President, and he was very moderate as they go. There was a reason for that.
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I just wanted to make a brief comment regarding the statement below which was included in your interesting post. Though tax cuts have been followed by revenue increases, these don't seem to be related as cause and effect. As far as I can tell, the only times revenues increased following lowered tax rates was in periods also following increased borrowing and spending by the federal government. Government spending increases tax revenues, so it is difficult to separate the revenue increase that is due to increased government spending from the increase in revenue that may be due, at least theoretically, from decreased tax rates.

It seems more likely that increased government spending, rather than decreased tax rates, is responsible for revenue increases. If you can find a period of increased revenues following decreased tax rates with constant government spending throughout, I would be most interested. I don't think you will find it.

Quote from JerryAdler:


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Historically, more tax revenue is collected when tax rates are lower.
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I didn't read every post so forgive me if the following point has already been made. Back when American's paid much higher taxes, and people seemed ok with it, the government was probably run much more efficiently, which gave people faith in their government. Today the government has gotten so large and inefficient it seems like for every $1 given only .10 goes to the actual reason for the tax and the rest is wasted in countless ways (bureaucracy, welfare state, bailing out failures, etc.). If I believed that my tax dollars were truly being used efficiently to actually help the American people and the country as a whole then I would have no problem paying more taxes, but I don't. I don't believe that our government is of the people and for the people like it used to be.

So with that said, higher taxes wouldn't have nearly the same impact it had in the 40's and 50's, simply because the government, and the people's faith in it, is no where near the same as it was then. The US then and the US now are two different countries. So, the problem isn't more or less taxes, the problem is the entity that is receiving the taxes.
 
Not this again...

Here's what someone posted on another forum in response to this "let's tax our way to prosperity with the old rates" fallacy:

"The dishonesty or perhaps ignorance in the tax debate that is going on today is the complete misrepresentation of the pre-TRA86 higher marginal rates in the old '53 code. Sure the marginal rates were insane, but the underlying tax code was rife with loopholes that a good tax planner (I was one) could exploit to get a persons effective tax rate as low or lower then it is today. Those loopholes are no longer part of the tax code which is a good thing as they encouraged investors to invest in projects that had no economic viability other then the income sheltering effect they created.

What else is ignored in the conversation is the fact that there was a massive amount of tax fraud at all income levels under the old code. It was so bad and so common that most people took pride in telling others how they cheated on their taxes. When I was practicing it was quite common for us to pick up clients that had owned businesses that had grown into large enterprises that cheated extensively on their income taxes sometimes for decades. Usually the only reason this ever got exposed was due to the owners wanting to sell or go public.

Today it would be very hard to get away with significant tax fraud for very long and the current code does not offer very many ways to legally shelter income, so a marginal tax rate of 70% would probably produce an effective tax rate on the top 5% of at least 45-50% which would be more then double double what the effective rate was under the old tax code. Thus, if we were to go back to those insane marginal tax rates, we would be crossing into a level of taxation never seen in this country."
 
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