Economics, Taxes and Spending

How much did we tax the rich during the greatest period of growth in American history?

Former US president Bill Clinton speaks at the World Economic Forum in January 2011. Image Credit: World Economic Forum (Flickr) (CC BY-SA 2.0)

Former US president Bill Clinton speaks at the World Economic Forum in January 2011. Image Credit: World Economic Forum (Flickr) (CC BY-SA 2.0)

People say, why worry so much about raising the marginal tax rate by a few percentage points? Do 4.6 points really matter, people like my colleague Michael “Tax and Spend” Strain and Louisiana Governor Bobby Jindal ask. Rates are “low” as they are, and it’s not like we’re talking about raising them to 75% here, they claim.

And I’m not going to judge them for that. They live in a world in which mass media and public discourse have conspired to trick them into believing such things. Clinton-era rates brought such prosperity!

Current rates are lower than they were in 1997! The ’50s were awesome and rates were much higher then!

Well, lemme tell you something: The period of greatest economic growth in American history was 1880-1910. What was the top federal income tax rate back then? Correct, 0%. Zero. Nada. You know, where people get to keep what they earn. THAT should be the baseline, not some arbitrarily high rate that seems reasonable because your frontal lobe is drowning in recency bias and your temporal lobe only processes Maddow and Matthews.

18 thoughts on “How much did we tax the rich during the greatest period of growth in American history?

  1. “Well, lemme tell you something: The period of greatest economic growth in American history was 1880-1910. What was the top federal income tax rate back then? Correct, 0%. Zero. Nada. You know, where people get to keep what they earn. THAT should be the baseline, not some arbitrarily high rate that seems reasonable because your frontal lobe is drowning in recency bias and your temporal lobe only processes Maddow and Matthews.”

    To make a comparison to that period of times can only demonstrate the intellectual emptiness that is the daily staple of this site.

    The 1880-1910 period was also one of crushing misery, disease, and poverty for the overwhelming majority of Americans, something a person of your “Christian” morals wouldn’t care about.

    Everytime I think this site overreaches on stupidity and ignorance, some moron comes along and sets the bar even lower.

    Your comments are asinine.

      • Gee, that would mean economic growth isn’t correlated to taxes at all, since the highest tax levels were achieved in the 1950s, which most Americans fondly remember as a time of great prosperity.

        You must be on the editorial board of (cough) American Thinker.

    • That simply is not true there Max. There was a short lived depression during that period but also a period of great wealth expansion. Much of the “misery” was as European immigrants came in massive numbers and struggled to join the great melting pot… they came because America was the greatest opportunity for a better life ON EARTH.

    • “To make a comparison to that period of times can only demonstrate the intellectual emptiness that is the daily staple of this site.”

      Now…to compare the two periods….

      “The 1880-1910 period was also one of crushing misery, disease, and poverty for the overwhelming majority of Americans”

  2. “The 1880-1910 period was also one of crushing misery, disease, and poverty for the overwhelming majority of Americans …”

    Max, your point does not address or refute Mr. Veuger’s claim. You have described all of human history prior to the industrial revolution – taxes or no taxes.

  3. You have your wish. Poof!! No more income tax and we are back to 1892.
    What is going to be the tariff rate on imports? 35%? 40? China would stand for that. Not!
    Since your opinion is pure fantasy, how would we defend ourselves from the dragon hoard invading America without funding our military? Oh yeah, Romney bayonets…

    • how do we deploy a military bigger than the next 10 in a row without income taxes?

      simple. You just wave your anti-tax hands even more furiously!

      these folks are simply not serious… self-delusional living in a pretend world – apart from the realities.

  4. The truth is that rates don’t matter much. Since WWII, taxes as a % of GDP average around 18%. They have actually risen as a % of GDP AFTER the Reagan, Clinton, and Bush tax cuts due to economic expansion. Not surprisingly, they fall during recessions and weak economies.

    So… if you really, really want to increase revenues then go to a simpler form of taxation (preferably a flat tax with a single high standard deduction for every adult and one or two rates) then LOWER the tax rate until revenues stop increasing. The IDEAL would be taxes at around 15% of a VERY robust economy.

    INCREASING TAX RATES HAS NEVER proven to be an effective means of raising revenues. It simply makes the economy smaller and thus makes revenues lower.

    • re: raising taxes

      the bottom line is that you have a trillion dollar deficit and a 16T debt.

      you figure out how you want to balance the budget and buy down the debt but stop arguing about what you don’t like and get on to solving the problem.

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