When today's wealth accumulation is more concentrated than in 1999, when the richest 1% (about 2.7 million people) has as much to spend after taxes as the bottom 100 million, isn't it time to go back and add a top tax bracket or two that worked?

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In 2008 we had 6 marginal tax brackets topping out at $357,700. In 1954 we had 24 marginal brackets and rates ranging from 20 – 91%. When we had progressive rates on the very rich, we built the world’s finest road, utility, education, space, and science infrastructure; and with that came the largest, most educated, and hardest working middle class the world had known. When today’s wealth accumulation is more concentrated than in 1999, when the richest 1% (about 2.7 million people) has as much to spend after taxes as the bottom 100 million, isn’t it time to go back and add a top tax bracket or two that worked? 

In 1944 the top marginal tax rate on income over $200,000 was 94%.In 1954 the top marginal tax rate on income over $400,000 was 91%.In 1964 the top marginal tax rate on income over $400,000 was 77%. 

In the 50s and 60s, the rich had many loopholes, as author Philip Stern pointed out in his Great Treasury Raid. Kennedy proposed closing many of those loopholes in return for lowering the top marginal tax rates. 

In the 50s and 60s, WHEN THE MIDDLE CLASS GREW in America, the rich also did well. They just didn't do obscenely well. Back then, America had growing unions and wages. 

Generally, one parent could work while the other concentrated on the kids. My three Teamster uncles and dad moved us, as did millions of other hopeful, hard working families, into America's growing middle class -- when the top marginal tax rates were very high. 

Around the 70s, American lawmakers, who hear from more rich people than they do truck drivers, began lowering the top marginal taxable incomes. Who benefited most? America’s cheering super rich, whose tax tapped wealth had contributed to build our middle class. 

This was a sneaky structural way to move healthy marginal rates down into the high middle incomes. It was a sneaky way to get upper middle income Americans to rant and rave about taxes, while not establishing other income brackets for those earning 1, 2, and 3+ million dollars per year. 

The calculating super rich had lawmakers fashion them a tax code that allowed a plethora of loopholes. In addition, this beneficially fashioned tax code built them an army of complaining, overburdened, upper-middle-class Americans, who were carrying the tax load that the super rich were evading. The super rich were becoming mega-richer and using their richness to make sure they were not taxed as they were under Truman, Eisenhower, Kennedy, and Nixon. 

In 1974 the top marginal tax rate on income over 200,000 was 70%, on earned income only it was 50%. In 1984 the top marginal tax rate on incomes over $162,400 was 50%. In 1994 the top marginal tax rate on incomes over $250,000 was 39.6%In 2003 the top marginal tax rate on incomes over $311,950 was 35%. (source) In 2008 the top marginal tax rate on income over $357,700 was 35%. 

If one assumes an inflation rate of 4% since 1954, then 1954’s $400,000 top marginal income bracket in 2004 would have been $1,111,111. Maybe we should have continued something around 1954’s tax rates (91%) on the income earned above $1.1 million, and poured those revenues into making college educations more affordable to our shrinking middle class? Or filled our potholed riddled roadways? Or built a competitive rail system and rail industry? 

In 2004, we had many individuals making not merely $1 million but $10+++millions. And these individuals seldom paid at the same rate that the tax-beleaguered upper-middle-class Americans paid. The upper middle-class has been heavily taxed, because we haven't imposed a progressive tax structure on those who earn over 1, 10, 20, 30+ million per year. We don't even have a bracket for those who earn 1+ billion per year. Even the world’s richest guy, Warren Buffett, thinks this is stupid and unfair tax policy. 

When you let this disproportionate tax policy continue for generations, you lose a hell of a lot of tax revenues. In addition, wealth building goes to those benefiting from the tax code, which helps spoil children of the mega-rich with unearned inheritances while bleeding those of a once vibrant middle class who work longer and harder for less. 

The average income of all households in 2000 was $42,700, while the 13,400 households at the very top had an average income of $24 million or 560 times the average. In 1970, the very top group had about 100 times the average. (Source: Perfectly Legal, David Cay Johnston). 

In 2006, the top 400 earners on average pulled in $263 million each. On average, they paid a federal income tax bite of 17%, much lower than the advertised 35% top tax bracket and probably a lower rate than you paid. (Source: Forbes Magazine )

Think of one of your more competent friends. Let’s say he/she earned $100,000 in 2006. Do you really believe that those 400 Richest Americans work 2,630 times harder than your friend, or are that much smarter? 

Do you believe if there were tax rates like we had under Truman, Eisenhower, Kennedy, and Nixon -- when the middle-class grew in America rather than shrunk -- that these 400 richest Americans would suffer, or even quit working hard, like so many rich, illogical, clueless radio screamers claim? 

Let's pretend that a tax bracket was added that said for each dollar over 50 million earned, 70% would go to rebuilding America. Let's assume that something close to effective tax rates were actually paid. Then the 400 richest Americans, who averaged $263 million in income, would have to struggle by on about $165 million annual income. 

Do you believe that it would be unfair to have the richest 400 live on an average of $165 million? That additional 70% bracket would return about $26 billion in public revenues to rebuild a working structure for beleaguered Americans. And if the richest Americans wanted to avoid paying those taxes they could, instead of taking $263 million in income, invest those profits in creating new businesses and employing Americans at home, thereby reducing their taxable income by taking entrepreneurial risks. 

Would it bother you to have taxes taken from those in a newly formed mega-rich tax bracket (s) poured into education, a rail system, a new energy grid, healthcare, NASA, etc.? The super rich have been scarfing up money, power, and lobbying connections at the expense of the middle class. They got the money. Many of them inherited the money. Some didn't earn it. If we are going to get out of this depressing cycle and rebuild our crumbling infrastructure and character, we need a much more progressive tax structure to rebuild the shrinking middle class. 

Bonnie and Clyde had a car that they had to keep gassed. Maybe that's why when asked, "Why do you rob banks?" They answered, "Because that's where the money is.” 

Establishing a more progressive tax structure for the super rich is not robbery. A fairer tax code will not take their many estates, jets, silverware, etc. It will just take a bit more of the humongous and increasing wealth they have been sending to their chalets. They safely accumulated this wealth thanks to having walked on the shoulders of those who built roads, bridges, sewers, electrical grids, dams, schools, factories, rockets, etc., in the 40s, 50s, and 60s. Back then, executives who supervised the building of our infrastructure and middle class paid much higher tax rates than recent generations of the super rich have. 

Many of today’s super rich keep their limos gassed by specializing in the production of credit cards, insurance programs, papered financial gimmicks, and lobbyists -- but their work is not called robbery. If we are concerned about not burdening our children with debt, then a progressive tax structure must tap the spigot from which the money flows. The super rich and mega-corporations are monopolizing today’s money and wealth, so to remove the burden from tomorrow’s kids, revive a bracket or two that taxes the mega-wealthy today.

Authors Website: http://peopleslobby.us/

Authors Bio:

Dwayne served in the Peace Corps in the slums of Mumbai, India, worked several Habitat Projects, and was on the start-up team of the California Conservation Corps. He has a Ph.D. from Claremont Graduate University, has been a builder, teacher, political organizer, small businessman, affordable housing developer, and a rock-piler at Rubel's Castle. Some pics and stories at http://peopleslobby.us/more-projects/rubelia.

Some story tidbits about his recent well-regarded book about Rubel's Castle are available at http://peopleslobby.us/more-projects/rubelia.

In 2013 Rubelia was designated a National Historic Monument, right up there with Hearst Castle. CBS clip: Rubel's Castle is on verge of listing on National Registry http://losangeles.cbslocal.com/2013/08/07/rubel-castle-in-glendora-on-the-verge-of-getting-national-historic-recognition/

Dwayne is presently Executive Director of People's Lobby Inc (PLI, 501c4)and People's Lobby's Education Foundation (PLEF, 501c3). You can read PLI's American World Service Corps Congressional Proposal (AWSC) at
http://peopleslobby.us/awsc-congressional-proposal

Rebuilding People'Lobby web site is available at http://peopleslobby.us/

Congresswoman Woolsey (D, CA) offered to introduce it in the 111th Congress, then retracted. Please contact your Congressional reps and ask them to become an original sponsor or cosponsor. The AWSC citizen-initiated congressional proposals could be, with you pushing your representatives, among the most significant legislation passed and implemented in decades. Imagine having 21 million Americans cost effectively doing good at home or abroad over the next 27 years.

In December 2009 Ralph Nader choose People's Lobby's book, "Ordinary People Doing the Extraordinary, The Story of Ed & Joyce Koupal's People's Lobby" as one of the Ten Best Books to Read for 2009. You can purchase the book from PeoplesLobby.us or learn more at http://peopleslobby.us/more-projects/books.

"This country runs on laws. If you want to change the country, write its laws," People's Lobby's founders Ed and Joyce Koupal used to say. If you want to enlighten public policy, involve millions of Americans in addressing public needs, prepare for climate weirding, etc., help make it happen. The AWSC addresses with people action many of our most pressing and costly needs. To sign the reopened American World Service Corps petition/letter, which contacts Congress for you: Paste http://www.change.org/petitions/view/field_21_million_american_world_service_corps_volunteers_over_the_next_27_years
Please help make the AWSC happen. To learn more about People's Lobby, visit the web site at www.Peopleslobby.us.

Recent books both available on line and from publishers: Every Town Needs a Castle (Prelude to next book, Every Country Needs a World Service Corps)
http://peopleslobby.us/more-projects/rubelia


Ordinary People Doing the Extraordinary (Nader's 2009 TopTen Books to Read List)
http://peopleslobby.us/archives/736
Library: http://peopleslobby.us/organizations/peoples-lobby/library