06-02-2015, 02:59 AM
Here's another idea.
The late 1950s and 1960s were the time of America's greatest growth and power. Over recent years I've asked hundreds of people what they thought the maximum tax rate was in 1959 under Eisenhower. ( At that time the maximum tax rate was for a couple filing jointly with income over $400,000/year). The typical answers have ranged from 5% to 20%. For all the times I asked that question only two people were close to the correct number. Bill Foster, a physicist and industrial lighting entrepreneur turned Congressman was one. I don't recall the other.
The answer is 91%. That's right. The top income tax rate under Eisenhower was over 90%. How could the enormous growth seen in the US during the 1960s have happened with such a confiscatory tax rate?
I explain it this way. If I owned a company that earned a million bucks and had a choice of investing that million in my company and its people or giving $900,000 to the government and putting $100,00 in my pocket, I'd invest in my plant and people. On the other hand, with today's tax laws the numbers are almost completely reversed. If my company makes a million bucks I’d put $900,000 in my pocket and then complain about confiscatory federal taxes costing me $100,000.
So what can be done to boost investment and encourage demand for goods and services and thus return our economy to the boom years? Return the income tax rates to where they were during the time of America’s greatest growth and power.
The late 1950s and 1960s were the time of America's greatest growth and power. Over recent years I've asked hundreds of people what they thought the maximum tax rate was in 1959 under Eisenhower. ( At that time the maximum tax rate was for a couple filing jointly with income over $400,000/year). The typical answers have ranged from 5% to 20%. For all the times I asked that question only two people were close to the correct number. Bill Foster, a physicist and industrial lighting entrepreneur turned Congressman was one. I don't recall the other.
The answer is 91%. That's right. The top income tax rate under Eisenhower was over 90%. How could the enormous growth seen in the US during the 1960s have happened with such a confiscatory tax rate?
I explain it this way. If I owned a company that earned a million bucks and had a choice of investing that million in my company and its people or giving $900,000 to the government and putting $100,00 in my pocket, I'd invest in my plant and people. On the other hand, with today's tax laws the numbers are almost completely reversed. If my company makes a million bucks I’d put $900,000 in my pocket and then complain about confiscatory federal taxes costing me $100,000.
So what can be done to boost investment and encourage demand for goods and services and thus return our economy to the boom years? Return the income tax rates to where they were during the time of America’s greatest growth and power.