Posted 1 year ago on Sept. 24, 2012, 2:59 p.m. EST by jrhirsch
from Sun City, CA
This content is user submitted and not an official statement
First let's take a look at economic history to see how our ideas about taxation actually worked in the past. From 1958 to 1968 the U.S had 10 of the best years in memory. Average income grew by $13,000 with the lower 90% sharing 62% of that gain. All income levels benefited.
The top marginal tax rates were much higher than today. Income tax 90% then, 35% now, corporate tax 50% then, 35% now, and capital gains tax 25% then, 15% now.
According to people who favor low taxation, we should have had a much weaker economy. The fact we had a strong economy was probably due to a stronger union presence, which kept low and mid income wages up, and higher taxes on the rich which meant a lower tax rate on the low to mid income workers.
One way to look at economics is to compare it to a human body. Blood flow being analogous to money flowing through our economy. If the blood flow is shunted to the head, as with high profits and low taxes for the rich, the legs and arms do not receive enough blood flow and can't function properly. The economy slows, unemployment rises.
The period from 1998 to 2008 had relatively low marginal tax rates with the result being the bottom 90% having negative growth in income.
We should have had a healthy economy if the trickle down theorists were right. Lets try another period. 1919 to 1929. Low taxes for the rich, but the result for the lower 90% was just a 4% increase in income.
Directing money back to the low and mid income workers by increasing taxes on the rich and reducing profits by increasing wages actually makes the overall economy healthier. It may not sound fair, at least for the rich, but it is fair for the majority, the entire body. Why should one part of the body suffer so that another part can benefit?
There are people who favor austerity as a means to fix the economy. Cutting off the supply of money to the legs of the body of our economy, the lower and mid income workers, diverting the flow of wealth where it is not needed. It's a recipe for another great depression. For those who agree with this approach, try applying tourniquets to both legs and tell us how much it improves your health.