Does anyone out there agree that from 1933 to 1989, were really great years for the US? We won a world war, helped suppress the growth of Communism worldwide (under the guise of totalitarian dictatorships), invented the personal computer, broadcast, internet, TV, radio, sent a man to the first other world (moon), etc.
That said, the top marginal tax rate from 1933 to 1989 ranged from 50% - 91% over the entirety of that time. Marginal tax rates this steeply graduated are not fair. I agree 100%. That said, they work. Not only do they work, but they, so far, are the ONLY effective model at raising the middle class and the poor. If you live in Australia in 2012, and you make $180K/yr, you pay over 50% in income taxes. And guess what? People are still getting rich, trying to get rich, and virtually no poverty, with public debt at a cool 26% of GDP.
Steeply graduated marginal tax rates along with effective deductions are the ONLY model that has produced middle class and raised up the poor, both in our own history, and the example in the 170+ countries on earth. This, by the way, is the ONLY measure by which we measure the success of a country. If it wasn't, then India, with lots of billionaires, and over 700 million people living on less than $2US/day, would be a successful country comparatively.
Financially, the 30's-through the early 60's sucked compared to today.
50 years ago, GDP was just over half a trillion. Today, it's over 30 times higher, while CPI is about 7 times higher than 1962.
Back in "the good old days" of 91-94 percent marginal rates, loopholes abounded, and the income at which said rates kicked in would be over $4 million/year in today's dollars, compared to the marginal rate kicking in at about $400K/year today.
Also consider that 50-75 years ago, the percentage of taxpayers who had either a zero or negative federal tax burden was pretty much ZERO. EVERYONE kicked in. Check the Tax Foundation or the IRS website archives for a listing of brackets. Only in the last 40 years with the advent of the welfare state (thanks to the "Great Society") do we see a significant percentage of the population with a zero/negative federal tax burden, to the point where half effectively pay no taxes or, thanks to EIC, etc., get more back than they pay in.
But you already knew all this, I'm sure.
