Plutocracy: If Corporations and the Rich Paid 1960s-Level Taxes, the Debt Would Vanish

Once upon a time in America, back a century ago, our nation's rich paid virtually nothing in taxes to the federal government. And that same federal government did virtually nothing to better the lives of average Americans.

But those average Americans would do battle, over the next half century, to rein in the rich and the corporations that made them ever richer. And that struggle would prove remarkably successful.

By the 1950s, America's rich and the corporations they ran were paying significant chunks of their annual incomes in taxes - and the federal projects and programs these taxes helped finance were actually improving average American lives.

If corporations and households taking in $1 million or more in income each year were now paying taxes at the same annual rates as they did back in 1961, the IPS researchers found, the federal treasury would be collecting an additional $716 billion a year. In other words, if the federal government started taxing the wealthy and their corporations at the same rates in effect a half-century ago, the federal debt to investors would almost totally vanish over the next decade.

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Our political system is failing to tax the rich because the rich have fortunes large enough to buy off the political system. Again, some numbers can help us better visualize that plutocratic big picture. In 2008, the IRS revealed this past May, 400 Americans reported at least $110 million in income on their federal tax returns.

These 400 averaged $270.5 million each, the second-highest U.S. top 400 average income on record. In 1955, by contrast, America's top 400 averaged - in 2008 dollars - a mere $13.3 million. In other words, the top 400 in 2008 reported incomes that, after taking inflation into account, amounted to more than 20 times the incomes of America's top 400 a half-century ago. But 1955's top 400 didn't just make far less than 2008's top 400.

The rich in 1955 paid far more of their income in taxes than today's rich. In 2008, the new IRS data show, the top 400 paid only 18.1 percent of their total incomes in federal income tax. The top 400 in 1955 paid 51.2 percent of their total incomes in tax.

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Link to source material

Well golly....how did we have jobs in the 1960's with the higher tax rates? How did we ever have any jobs since after the great depression when tax rates have been higher than they are now?

As you can see, the only solution is not slicing the throats of struggling American families, the unemployed, and poor.

It's about time people recognize why government is corrupt and why laws are currently in the process of being pushed through.

This isn't the poor man or middle man's agenda being pushed through government, this is the billionaire/corporate agenda being pushed through government...and we will all suffer for it.

You know, I just had a thought.

The uber-wealthy are cutting their own throats by not contributing taxes. If the economy tanks, their money will be worthless, and they can't eat gold, diamonds, or stock certificates. I doubt any of these bankers and corporate big wigs could survive for a month without cooks to make their meals and servants to clean up after them. I'd bet my left nut that none of them have so much as a callous on their manicured fingers.

Remember what happened when the market crashed in '29? The "rich and powerful" were jumping out of their Wall Street windows because all of a sudden they were broke.

Suddenly I'm feeling like BRING IT ON! My family can survive just fine on my skills as a hunter and fisherman. And when I hear about the elites killing themselves I'm going to sit back, munch on my squirrel burger, and LAUGH MY ASS OFF!

The following fact was sent to numerous conservative pundits, politicians, and profitseekers:

Based on Tax Foundation figures, the richest 1% has TRIPLED its share of America's income over the past 30 years. Much of the gain came from tax cuts and minimally taxed financial instruments. If their income had increased only at the pace of American productivity (80%), they would be taking about a TRILLION DOLLARS LESS out of our economy.

And a question was posed:

In what way do the richest 1% deserve these extraordinary gains?

This question was not posed in sarcasm. A factual answer is genuinely sought. It seems unlikely that 1% of the population worked three times harder than the rest of us, or contributed three times as much to American productivity. Money earned from tax cuts and minimally taxed financial instruments is not productive income.

The Question Conservatives Can't Answer

And you have people driving around in beat-up wrecks bearing bumper stickers supporting this sort of behavior.

That's the part I don't get.

reply to post by OldCorp


You make a good point....unfortunately most won't be able to fish and hunt for food as you will. Just imagine what would happen to the large cities for instance..

Actually I don't want to imagine...wouldn't be a pretty sight.

reply to post by David9176


How does Patriotism play a role in the difference between then and now?

I would imagine that in the 1950's fresh off a war, many rich folks would have been a lot more patriotic and loyal to what was best for America.

Nowadays, business is more global.

Originally posted by David9176
reply to post by OldCorp

 

You make a good point....unfortunately most won't be able to fish and hunt for food as you will. Just imagine what would happen to the large cities for instance..

Actually I don't want to imagine...wouldn't be a pretty sight.

Yeah, I guess that does take some of the fun out of it.

Here's to hoping that they kill themselves BEFORE the economy tanks.

reply to post by jam321

How does Patriotism play a role in the difference between then and now? I would imagine that in the 1950's fresh off a war, many rich folks would have been a lot more patriotic and loyal to what was best for America.

Don't know how much of a role patriotism played...i'm sure it had more of an influence then as it does now. But back then the unions were far stronger as well.

Multinational corporations no longer have loyalty to our country...they only want control of our government to maintain the power and wealth they have gained.

This debt battle is proof of that. It's not about the well being of the people of this country...it is about wealth, power, and control.

Even these entities that hate "government" are still dependent upon it to maintain their power.

reply to post by David9176


star and flag well said!!!



now if we could just WAKE UP the wannabe rich [those that empathize with something they would like to be].everyone would wish to be the kings in a banana republic ..who have been so completely indoctrinated by the scam we could get somewhere..

tea partiers are slow to it. The Rich have manipulated the tax system, bled everyone dry (they make the PROFITS--keyword) and now the country is in disarray, they have scammed the sheeple into wanting to get rid of taxes!!!
BECAUSE..................... the rich know their enormous ill-gotten gains are in jeopardy of being TAXED.

dum dum dum dum... my how sheeple are slow

Lol your OP made me laugh. If the rich were taxed now as they were in the 60's we would still be in this mess. The only difference would be that the government would have more money to waste.
Say what you want the rich did not cause this by themselves, no more than the 49% of Americans who don't pay taxes did.
Our government is corrupt David. No matter how much you give them, and no matter from whom you take it, they will always want more.
Ever heard the saying "the rich keep getting richer while the poor keep getting poorer"?
Who makes that possible?
Who is actually working to make it happen?
THE GOVERNMENT.
Ask yourself a couple of these questions.........
»How many poor people (not elderly, most of them have worked for a living but were not able to save enough for retirement) has the government actually helped with all of the "assistance" they provide?
» If the most of these entitlement programs actually fail those whom they are intended to help, why keep pouring money into them?
» Why would our government want certain classes of people to stay poverty stricken?
» How will taxing the rich solve our problems? Be honest.
The problem we have is that many in our government want certain people poor, it provides a nice voting base. They fool these people into thinking they want to help, but actually they just want to help themselves.
If you really wanted to help the poor (again, I am not speaking of the elderly or disabled) wouldn't you offer programs that lifted their self esteem and self worth? Help them believe that they can overcome their current situation.
Or would you make it where they just got a check and foodstamps every month? By doing so you would be breaking their self image, making them feel dependant upon others, which leads to them blaming others for their situation. They begin feeling that there is no way out, so why try? They adopt the mentality that the government will provide for them.
Many good hearted people get sucked into this scam as well. They fight for more entitlements for the poor because it makes them feel like they are helping, like they are doing something good. They are led by their heartstrings into condemning these people to a type of modern slavery.
About the only solution left to us is to let the entire system crash and reboot. That and clean house in DC.

reply to post by Quadrivium


just consider the FACTS, americans were more prosperous 1950s-1990's than today. no?

the rich paid WAAAYYY more taxes then no?

towns, cities, libraries, parks, hospitals, schools, roads, neighborhoods, etc were all nicer no?

do you even consider that if "the rich" i.e. employers were to choose between being taxed at a higher rate that more of their profits would end up in the hands of the workers instead of the govt. Meaning, "well if Im gonna be taxed (x) amount I might as well give it to my workers instead of the govt. In turn lowering my own taxes because my profits are lower"

does the term 'lion's share' ring a bell?

Then rich have CUT OPEN THE GOLDEN GOOSE (society/workers/middle class) in order to get at the eggs..

percentages and pie charts would be easier way to explain it.

If the avg worker get 1% of something , rich get 5% there would be more balance.

But, if avg worker get 0.001%, and rich get 15% there would be less balance. therefore causing more stress on the system THROUGH...WAIT FOR IT..wait for it......................IMBALANCE!!!

a LARGER portion of wealth concentrated in fewer people's hands create imbalance no? and those ill-gotten gains are then used to INCREASE influence which in turn perpetuates the IMBALANCE!!!!

reply to post by David9176


One problem with the source material though. It doesn't mention the amount of money the rich evaded through loopholes or simply practiced actual tax evasion and hid the money from the IRS. It was a lot simpler back then to hide income. No computers. Offshore tax havens. And with the tax loopholes we all know exist for the rich there would have been much less income from them than those articles you quote indicate. Rich people get away with paying no income tax today and they got away with it 50-60 years ago.

For the truly rich the income tax is a farce and will always be a farce. It's a lot cheaper for them to buy congressmen instead.

reply to post by rebeldog


Americans were more prosperous in the 50's and 60's? Do you realise that the dept ceiling was raised for the first time in 1962 by 200 billion? And 75 more times since then?
I am not against raising taxes on the oobber rich. I am against doing it now.
First we need to get spending and waste under control. Then taxes can be raised to pay down the debt. If they are raised before we get things under control they will just waste it.

reply to post by ntech


Incorrect.

The top tax bracket circa 1955 was 91.0%.

After loop holes and write offs, the average "paid" taxes was in 51.2% range.

To answer the "unaswerable question" posted above, as to why this can't be replicated today:

It ain't 1955 anymore.

In 1955, it would have taken YEARS to move a corporation's headquarters.

Today it can be done in a matter of days.

There are countries that will now have very good looking tax rates that the US has FTA's with. That means lots of places with no tariffs to move to.

The only way that it would work today is if all other economy legislation was reverted back to the 1955 legislation. That would, however, kill any part of your economy that relies on trade...so basically all of it.

Just set the tax rate to something reasonable, like 40% and remove loopholes. Make capital gains the same rate as your taxes if your income in either is over $1,000,000 and call it a day.

Originally posted by rebeldog
reply to post by Quadrivium

 

just consider the FACTS, americans were more prosperous 1950s-1990's than today. no?

the rich paid WAAAYYY more taxes then no?

towns, cities, libraries, parks, hospitals, schools, roads, neighborhoods, etc were all nicer no?

do you even consider that if "the rich" i.e. employers were to choose between being taxed at a higher rate that more of their profits would end up in the hands of the workers instead of the govt. Meaning, "well if Im gonna be taxed (x) amount I might as well give it to my workers instead of the govt. In turn lowering my own taxes because my profits are lower"

does the term 'lion's share' ring a bell?

Then rich have CUT OPEN THE GOLDEN GOOSE (society/workers/middle class) in order to get at the eggs..

percentages and pie charts would be easier way to explain it.

If the avg worker get 1% of something , rich get 5% there would be more balance.

But, if avg worker get 0.001%, and rich get 15% there would be less balance. therefore causing more stress on the system THROUGH...WAIT FOR IT..wait for it......................IMBALANCE!!!

a LARGER portion of wealth concentrated in fewer people's hands create imbalance no? and those ill-gotten gains are then used to INCREASE influence which in turn perpetuates the IMBALANCE!!!!

I think it is the multicultural effect. As the Majority race/ethnicity's are supplanted by new racial groups/ethnicity's, the majority race incrementally stops caring about the community/country. Why should we subsidize our own destruction? The only way to end multiculturalism is to make the "white countries" poorer then the "brown countries".

I do not know if it is intentional or not, but it seems to be the way TPTB are handling the problem in America. They can't say anything publicly or it would start riots. If it is unintentional, well then I would be very concerned as that means fascism is in the works(in order to build a stable fascist foundation you need a country with a large over entitled/privileged female population that has fear in them. And a large dis-empowered, almost hopeless male population that has desperation in them).

The 'debt' is a fictional entity based upon multigenerational coercion and fraud propagated by the illegitimate thugs that rule each government. It is no more justly owed than protection money is owed to the mafia. This 'national debt' is enforced at the point of a bloody gun muzzle.

The 'debt' is really just another irrational superstition enforced at the point of a gun, like all irrational superstitions ultimately must be, if they wish to dominate, which they always do.

People do not owe a red cent to anyone that they did not willfully consent to contract with.

I withdraw my consent to be taxed for some fictional debt that i had zero say in.

reply to post by David9176


S&F for my buddy Old Corp, 3 today, but who's counting?
And to the OP... I ran across this interesting site. A few videos on the topic I am taking the "Liberty" (protect it!) to post here:

"Today's America is neither a democracy nor a republic, but a plutocracy - a government by and for the wealthy.

"I pledge allegiance to the logo of the Corporate States of America,
and to the plutocracy for which it stands, one nation under surveillance,
incorporated, with literal injustice for oil."

www.plutocracyusa.com... with

I've posted

this study

before. Few are likley to read the whole thing because it's just filled with too many facts and forces conclusions that just don't sit well with the people who have prospered disproportionately. Wealth in this country has been consolidated at an increasing rate over the last several decades. As of 2007 (it has gotten even worse since given the collapse of housing) 88% of the investment assets in this countrry were owned by 10% of the population.

The inheritance tax, as an example, is a target. We keep hearing the right argue how it should be abolished. Only 2.7% of Americans receive $50,000 or more in inheritance. 91.9% receive nothing. So changing that law would help whom?

Of all the new financial wealth created by the American economy in that 21-year-period (between 1983 and 2004 when the economy was booming), fully 42% of it went to the top 1%. A whopping 94% went to the top 20%, which of course means that the bottom 80% received only 6% of all the new financial wealth generated in the United States during the '80s, '90s, and early 2000s

similarly:

The rising concentration of income can be seen in a special New York Times analysis by David Cay Johnston of an Internal Revenue Service report on income in 2004. Although overall income had grown by 27% since 1979, 33% of the gains went to the top 1%. Meanwhile, the bottom 60% were making less: about 95 cents for each dollar they made in 1979. The next 20% - those between the 60th and 80th rungs of the income ladder -- made $1.02 for each dollar they earned in 1979. Furthermore, Johnston concludes that only the top 5% made significant gains ($1.53 for each 1979 dollar). Most amazing of all, the top 0.1% -- that's one-tenth of one percent -- had more combined pre-tax income than the poorest 120 million people (Johnston, 2006).

But the increase in what is going to the few at the top did not level off, even with all that. As of 2007, income inequality in the United States was at an all-time high for the past 95 years, with the top 0.01% -- that's one-hundredth of one percent -- receiving 6% of all U.S. wages, which is double what it was for that tiny slice in 2000; the top 10% received 49.7%, the highest since 1917 (Saez, 2009). However, in an analysis of 2008 tax returns for the top 0.2% -- that is, those whose income tax returns reported $1,000,000 or more in income (mostly from individuals, but nearly a third from couples) -- it was found that they received 13% of all income, down slightly from 16.1% in 2007 due to the decline in payoffs from financial assets (Norris, 2010).

And as we all know with wealth comes power. It gives you what you need to 'buy' politicians, hire lobbyists and influence legislative decisions that, of course, favor your best interests. That is, the interests of the top 10% at the expense of the rexst of us.

And finally:

And the rate of increase is even higher for the very richest of the rich: the top 400 income earners in the United States. According to another analysis by Johnston (2010a), the average income of the top 400 tripled during the Clinton Administration and doubled during the first seven years of the Bush Administration. So by 2007, the top 400 averaged $344.8 million per person, up 31% from an average of $263.3 million just one year earlier. (For another recent revealing study by Johnston, read "Is Our Tax System Helping Us Create Wealth?").

How are these huge gains possible for the top 400? It's due to cuts in the tax rates on capital gains and dividends, which were down to a mere 15% in 2007 thanks to the tax cuts proposed by the Bush Administration and passed by Congress in 2003. Since almost 75% of the income for the top 400 comes from capital gains and dividends, it's not hard to see why tax cuts on income sources available to only a tiny percent of Americans mattered greatly for the high-earning few. Overall, the effective tax rate on high incomes fell by 7% during the Clinton presidency and 6% in the Bush era, so the top 400 had a tax rate of 20% or less in 2007, far lower than the marginal tax rate of 35% that the highest income earners (over $372,650) supposedly pay. It's also worth noting that only the first $106,800 of a person's income is taxed for Social Security purposes (as of 2010), so it would clearly be a boon to the Social Security Fund if everyone -- not just those making less than $106,800 -- paid the Social Security tax on their full incomes.

So there you have it. Shouldn't be a surprise to anyone. The rish are getting richer. They are using their riches to continually stack the deck in their favor. There is no concern for America --- unless America amounts to no more than the top 10%. They off shore investments, dodge taxes and ship jobs overseas to further their gains. It is what it is. The days of 'God and Country' are sadly long, long gone.

I say we tax anyone making more than $500,000 year at %50.

Any corporation which makes more than $50 million at %60.

If they chose to leave, then fine. That just means there's that much more money to borrow and make companies with for the rest of us.

Originally posted by Hessling

The following fact was sent to numerous conservative pundits, politicians, and profitseekers:

Based on Tax Foundation figures, the richest 1% has TRIPLED its share of America's income over the past 30 years. Much of the gain came from tax cuts and minimally taxed financial instruments. If their income had increased only at the pace of American productivity (80%), they would be taking about a TRILLION DOLLARS LESS out of our economy.

And a question was posed:

In what way do the richest 1% deserve these extraordinary gains?

This question was not posed in sarcasm. A factual answer is genuinely sought. It seems unlikely that 1% of the population worked three times harder than the rest of us, or contributed three times as much to American productivity. Money earned from tax cuts and minimally taxed financial instruments is not productive income.

The Question Conservatives Can't Answer

And you have people driving around in beat-up wrecks bearing bumper stickers supporting this sort of behavior.

That's the part I don't get.

Great post I just wanted to point out that these figures do not include the Government (ehem as they are the largest hoarders of wealth and poer around)

And conservatives generally don't want any taxes. If that were the case then everyone would have to rely on themselves and their community instead of the government.

If anyone here reads Malazan book of the Fallen (epic series) I am talking about Karsa Orlong's tribes versus empires.

Originally posted by Cryptonomicon
I say we tax anyone making more than $500,000 year at %50.

Any corporation which makes more than $50 million at %60.

If they chose to leave, then fine. That just means there's that much more money to borrow and make companies with for the rest of us.

The problem is the tax structure.

The wealthy make most of their income from long term (1yr plus) capital gains which is not taxed at the income tax rate but at the capital gains rate.

I talk about this all the time as people don't seem to get it.

End the income tax and start taxing wealth aka Capital gains (or money for nothing really)
about 80% of income from top 10% is capital gains is not taxed at the wage earner's rate of the income tax.

You have to go straight to the source and income is just rhetoric.