fate
Could we compare the economy in the 1890's to the 1950's?
Of course we can.
Social scientists and economists do this all the time. They think they learn something from the process. And having actual data and facts as opposed to how we feel about something is important.
fate
Why does that matter? Because we don't make money the way we used to. We don't invest the way we used to. We don't do much of anything we used to. So, presuming a 60 year-old tax code might work now makes little sense. You're going to have to do a lot of extrapolating, estimating, and fudging to even come close to sorting it out.
So your arguing against the entire notion of economics and socio-economics.
Damn that intellectualism, eh?
One way that we can easily compare is to look at how individuals spent their incomes in various time periods.
http://www.bls.gov/opub/uscs/ We have something that's very close to an aggregate receipt for the American family going back more than a century: "100 Years of U.S. Consumer Spending", a report from the Bureau of Labor Statistics.
This is our story today: It is a story about how spending on food and clothing went from half the family budget in 1900 to less than a fifth in 2000.It is a story about how a nation that feels poor got so rich. Here's the big picture in one chart showing the share of family spending per category over the 20th century. The big story is that spending on food and clothes has fallen massively while spending on housing and services has gone up
.
We can also look at patterns of investment by industry and corporations. And its obvious that investment in the 50's and 60's in the US did not stop because of the tax rates.
The one thing that is different today is that we have a more global economy. But since only 27% of the US economy is based upon foreign trade, thee rest is domestic spending, it actually impacts the US much less than most trading nations..
rayjay
It would be good to examine the data during the high tax years. How many people were in the 90% bracket and how many were figuring out ways to have off-book income, phony deductions, cap gains instead of ordinary income, etc. There was a lot less of a paper trail back then. Perhaps there was a 90% bracket, but everyone managed to avoid it? Makes for a good PHD dissertation
Well,
perhaps isn't very compelling. Although I'll stipulate that thee higehr the tax rate the more compelling the appeal of tax avoidance or even evasion.
And compared to the corporations and rich individuals that avoid paying taxes through off shore shells and tax loop holes today ... ? I'm not sure that there would be a great difference in monies lost.
There were complaints about the complexity of the tax code back in 1950s and today... All of it probably true. But lets not forget that those loopholes and laws were all written to accomodate some lobby group or another.
So it does make sense to simplify the tax code, if for nothing else but to make the system more transparent and open to gauging fairness.
What a lot of ordinary people got in the 50s was, free education, low interest business loans, and free or low cost medical care. (Those people being white veterans of WWII). And in the 60's Medicare for the aged. Optimism that they could grow their own prosperity was a function of having these advantages. Things their parents never had....
What the US had as a country , was a functioning industrial base, where most of their competitors were rebuilding from the war. And the enormous advantages of geography, agriculture, and resources ... But there was also an enormous debt. And that debt was paid down with the combination of high taxes and an expanding economy.
You want to know the big disconnect today. People think they can lower taxes and get more revenue. That taxes can be cut to the bone but services they rely upon won't be affected.
The US still hasn't recovered from the myth of the 1980s Reagan revolution that expounded upon taxes as a great evil - instead of what they are - a way to collect money to pay for the things that society says are necessary for the common good.
In 1950 that was understood. In 1980, a myth of reward without cost began to grow.
And that attitude is reflected in Fates comment.... Deny the evidence or attempt to discredit it if contradicts the dogma.
14 Jan 2016, 6:04 pm 
