Contrary to Republican dogma, the more that all income above $3 million is taxed, the more that economic growth and total employment rises
Center for American Progress Director of Tax and Budget Policy Michael Linden found that "in the past 60 years, job growth has actually been greater in years when the top income tax rate (taxes on all income that is in excess of $3 million in today's dollars) was much higher than it is now":
For instance, in years when the top marginal rate was more than 90%, the average annual growth in total payroll employment was 2%. In years when the top marginal rate was 35 percent or less -- which it is now -- employment grew by an average of just 0.4%.
And there's no cherry-picking here. Pick any threshold. When the marginal tax rate was 50% or above, annual employment growth averaged 2.3%, and when the rate was under 50, growth was half that.
In fact, if you ranked each year since 1950 by overall job growth, the top five years would all boast marginal tax rates at 70% or higher. The top 10 years would share marginal tax rates at 50% or higher. The two worst years, on the other hand, were 2008 and 2009, when the top marginal tax rate was 35%. In the 13 years that the top marginal tax rate has been at its current level or lower, only one year even cracks the top 20 in overall job creation.
Obviously then, our work is cut out for us. We need to:
1. Reinstate Glass-Steagall so as to once again keep investment banks (which sell securities) separate from savings/commercial banks (which accept deposits and provide loans to home buyers and businesses). The removal of Glass-Steagall in 1999 directly contributed to the severity of the financial crisis of 2007--2011 by allowing Wall Street investment banking firms to gamble with huge pools of their depositors' money that was being held in commercial banks.
2. Overcome Republican opposition to a strong U.S. Consumer Financial Protection Bureau .
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