If the highest income earners today were required to pay at the same rate that they paid for many years after 1945, the federal government would have to borrow far less in order to nurse our sick economy through its current illness. Something else to keep in mind: those tax-the-rich years after 1945 saw far lower unemployment and far more economic growth than we've had in recent years.
Historical tax rates for the highest and lowest income earners
The lower taxes that the (politically influential) rich hustled for themselves are one reason why they have become so much richer over the last half century. Just as their tax rates started to come down from their 1960s heights, so their share of the total national income began their rise. As a result, we have now returned to the extreme inequality of income that characterized the US a century ago, and that led to the Great Depression.
From 1979 to 2005, (adjusted for inflation) the bottom fifth of our citizen income earners saw their incomes barely rise at all. The middle fifth of income-earning households saw their after-tax household income rise by less than 25% -- and that was primarily because so many housewives joined the salaried work force, to provide additional family income. Meanwhile, the top 1 % of households saw their after-tax household incomes rise by 175%.
To say it in the simplest terms,
- the richest Americans have far and away done the best over the last 30 years,
- they are more able to pay taxes today than they have been in many decades, and
- they are more able to pay than other Americans, and by a far wider margin than ever before.
Therefore, in a time of national economic crisis, they can and should contribute far more in taxes than they are now contributing. No more hiding their billions offshore, in Cayman Island tax havens or wherever.
Instead of tax fairness, however, a rather vicious cycle has been at work for years: Reduced taxes on the rich leave them with ever more money to influence politicians and politics. This influence wins them further tax reductions, which gives them still more money to put to political use. Then, when the loss of tax revenue from the rich worsens already strained government budgets, the rich and powerful press politicians to cut public services and government jobs and not even debate a return to the higher taxes the rich used to pay. In other words, in their unlimited greed, the rich have begun to strangle the rest of society in their perverse efforts to further multiply their wealth holdings and income.
Share of national income taken by top tranches of earners
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