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this post was submitted on 19 Aug 2024
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Fucking insane that 28% is a tax hike.
Should be no less than 90%, like it used to be.
The top marginal corporate tax rate never exceeded 52.9%. This is conflating the corporate tax rate with the individual income tax rate. The marginal rate was raised above 80% during the Great Depression, and it was raised above 90% in the 1940’s.
In the 1950’s, the top marginal tax rate was 90%, but people were allowed to avoid income tax by funneling income through corporate tax shelters, leaving a top effective tax rate that wasn’t much higher than it is today (the exact number is hard to calculate). Not only that, but the tax burden has also shifted dramatically since the 1950’s. In Eisenhower’s day, those earning more than $100,000 per year shouldered around 20% of the tax burden. Today, the equivalent economic class shoulders over ~~80%~~ 40% of the tax burden.
Heres another flaw: when tax rates were 90%, the tax code also provided for tons of deductions that no longer exist. It also treated income from many sources as not being subject to tax, such as income derived from trusts or investments held in trusts. Imagine Bill Gates placing his Microsoft stock into a trust and only paying tax on the money he takes as a salary from his Foundation or from speaking fees. Sure, his “tax rate” might hit 90%, but the vast majority of his income would escape taxation. Such was the tax code under Eisenhower. You can’t just compare tax rates without also accounting for the rest of the tax laws including credits, deductions, exclusions, and definitions of taxable income.
So, no, corporate tax rates were literally never 90%.
Are you including the fact that $100,000 in the 1950s is more than $1million after accounting for inflation?
According to some quick googling, $1,300,000 is the modern equivalent of $100,000 in 1950. That would put you in the top 5% earners (and very nearly in the top 1%). According to the IRS, the top 5% contribute about 65% of the tax burden.
The top 25% make up about 90% of contributions, but that starts around $70,000 annual income.