In the 1950s and early-60s the top marginal income tax rate was 91% (77% in 1964). We saw the middle class emerge in America, built the interstate highway system, adopted Medicare, went to the moon, paid for the Vietnam war, and lead the world. In those two decades the national debt remained virtually unchanged (in inflation adjusted dollars.) In 1971 Nixon cut the rate to 70% and the debt increased about 18% over a decade. In 1981 Reagan cut the top rate to 50%, then 28%. The debt increased 250% while the social safety net was slashed.
In the early 90’s Clinton raised the upper rate to 39.6%, balanced the budget and paid the debt down in his final year. The Bush tax cuts and middle east wars began the skyrocketing debt we have now structurally enshrined in a dogma of low taxes and failed trickle-down economics. Corporate tax revenues have declined from 6% of GDP in the early 50’s to 1% today while profits are an all-time high.
Since 1980 the rising tide has lifted very few boats. The richest 0.1% now have the same wealth as the bottom 85%. The system is rigged. If we want to return to the upwardly-mobile, can-do America of an earlier generation, we must pay for it as they did. When asked why he robbed banks, Willie Sutton replied, “Because that’s where the money is.” We know where the money is today.
— James Esh, Chico