Since when has labeling anything you disagree with “Socialism” a substitute for political discourse? We embarrass ourselves as a nation to the rest of the world when we do this.

Regardless, Wuerker of Politico puts this into better context:

via Politico

Hat tip PBH

See also:
Bill Gates’s Dad Says the Rich ‘Aren’t Paying Enough’ in Taxes

Category: Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

95 Responses to “Top Tax Rate? Socialism”

  1. DeDude says:

    And those are the same Tea-baggers that are choking over the deficits. This fits so nice with your Debt/GDP graph. When you lower tax-rates you grow the deficits. Most presidents have grown government expenditures at a rate close to the GDP (with a few stimulus exceptions). The myth of exploding government does not hold much during a reality check.

  2. Mannwich says:

    We embarrass ourselves on many fronts, BR. Just add it to the list.

  3. scepticus says:

    heh, I love it when someone kicks the anthill!

  4. Machiavelli999 says:

    The hilarious thing is that the Tea Baggers will claim that raising taxes reduces tax revenue and lowering tax rates increases tax revenue.

    This is hilarious because they should go tell the European Union that the EU should not make countries with high debt increase tax rates. Instead, Greece, Spain and the rest of the fiscally challenged countries should lower tax rates right now according to the Tea Baggers.


    Another interesting example. Back in 2000, when the big problem was what do we do with the surplus, the Republicans were of course pushing for tax cuts. Saying tax cuts would reduce the surplus and give it back to the people. But if they were consistent and not contradictory in their supply-side mantra, they would have advocated for tax INCREASES to reduce the surplus.

    These people are either purposefully deceptive or have a horrible case of cognitive dissonance. They refuse to accept facts that do not confirm the reality they have setup in their heads.

  5. scepticus says:

    “These people are either purposefully deceptive or have a horrible case of cognitive dissonance. ”

    The latter.

    To be fair to them, these people are the apogee of 3 centuries of capitalism, and arguably the glorious final culmination of the protestant reformation (a culture that now closely parallels the ponzi scheme that european catholocism had become before it was kicked out of northern europe and its dominions for ever by calvin, luther et al).

  6. franklin411 says:


    PS–Here’s another one. When Sen. Ben Nelson was asked why he voted against limiting ATM fees, he replied that he had never used an ATM in his life! But he knows all about the “holograms” in supermarkets (apparently, he meant UPC barcodes).

  7. Alan says:


    It also contradicts the old “starve the beast” justification for the Reagan tax cuts–cut taxes to create huge deficits which will in turn force government to cut spending.

    That worked out well….

    That’s why I emphasize the “used” when I say I used to be a conservative.

  8. Jerry 369 says:

    With all due respect to Gates Sr. F… you! If you truly feel that way,you and Warren Buffet can send the treasury any surplus cash you have! Better yet, send it to me!
    I am sickened by these cartoons. They serve no good. We as a nation,face the first serious depression of this century,and this is how we are admitting it? First thing you need to do to get recovery{Full Disclosure,17+ years sober},is admit you have a problem. We as a nation still wont even admit the problem exists. The depression will level the field,things will clear. We can go into this kicking and screaming like spoiled children{progressives}or stand up,suck it up and get on with it! We have faced much worse adversity as a country,we will overcome anything. Belief in God and each other will see us through all. America will always prevail.

  9. beatstreet says:

    #1 – I assume those are simply the top marginal income tax rates over time. that says very little about the overall tax burden on the economy
    #2 – whatever the tax burden is, its not nearly enough to fund the gov’t, which is running a $trillion plus deficit. what would the tax burden need to be to actually to properly fund the federal, state, and local gov’ts and their grossly underfunded pensions? My guess is that it would well north of 50%.

    The conclusion is that gov’ts, in order to properly pay for all of their programs and promises would need to command well over the majority of our country’s income. Call it whatever you like.

  10. FrancoisT says:

    “We embarrass ourselves as a nation to the rest of the world”

    But…Barry! Don’t ya know we’ve got this impenetrable shield called American Exceptionalism to protect us?


  11. aypay says:

    Fact is that most Americans want socialism. Top tax rates at 40% and bottom rates being below zero IS a form of socialism. The reason we can’t fund our budgets is that the politicians use budget money to bribe the voters (transfer payments are bribes) but don’t have the will to tax their friends (politicians and their friends are rich). I am not like most Americans and I don’t want socialism. I think it is pathetic that so many people do so little that is useful and then whine and moan about how hard it is to get by. In the USA. Where it is easier to get by than pretty much any place at any time in the history of man. Learn a useful skill, work hard, don’t get terribly unlucky, do well. Socialism uses the few legitimate sob stories of people who did it right and get stiffed to justify a system of transfer payment bribes to mostly a bunch of lazy and irresponsible people who were getting what they deserved until the free money checks arrived, which really just serves to get the same small group of politicians re-elected. Can you tell I am a libertarian?

  12. Patrick Neid says:

    Stockholm syndrome is alive and well here at the big pic.

  13. scepticus says:

    jerry, your great nation won’t last more than 2 years of GDII. I mean, it only took 4 years after 1929 before things got so bad that gold had to be revalued. This time that point will come much quicker, except this time there is no gold to revalue against.

    So at that point, some other cherished and supposedly bedrock but ultimately valueless symbol of our society will be sacrificed.

  14. RadioFlyer says:

    It might have been nice to go back a little further than Hoover, say, oh I don’t know, just a couple of years, when the top rate was 7%. Yes, 7%.

    Of course, we didn’t even have an income tax until 1861, so how about a graph going back to Washington, showing almost a century, and dozens of presidents, when it was 0%?!?!? Then it bounced around, between 1 and 7% for a half century.

    Regarding that graph, the huge numbers in the first half reflect 2 main items, WWI and WWII. I’m going to hazard a guess that the social programs of Hoover and FDR might have had something to do with higher tax rates….

    Sure, 40% doesn’t look so bad compared to 70% or 94%….but so what?

    Ever read the book “How to Lie with Statistics”? Here’s a link to it at Amazon:

  15. Peter Pan says:

    That 40% tax rate is entirely unfair. What we really need is a Steve Forbes Flat Tax to resolve all of our country’s problems. The bad news is that the flat tax rate would have to be 90%. The good news is that the flat tax rate would only apply to Steve Forbes.

  16. scepticus says:

    in 1861, there wasn’t democracy. The march of democracy and technology is responsible for the current size of the state. But we generally hold both the former to be rather good things, no?

  17. scharfy says:

    Dear Dad,

    You and your baby boomer friends gotta take some haircuts on benefits. You can’t retire @ 62,65 or even 67.

    Try 77. And you gotta take 25% less dough and less medicare and less of everything. Ya dig?

    And I am tired of your friends in Congress propping up the value of your overvalued home, which prevents me from buying a cheap one without overextending myself.

    Sorry, you had 25 years and you had your cake and ate it too and now you wanna pass the baton to Gen X and Gen Y with the mess you made? I know you are hungry, and you will eat, just a little less.

    You can’t have any of my cake. I will only give it to you when you clean your messy room, Dad.


    Your disgruntled Gen X son.

    PS this hurts me more than it hurts you. And I still love you. But since my generation is gonna pay the piper, we must call the tune.

  18. DeDude says:

    Seems like it is a lot easier to make the argument for “out-of-control” federal tax-cuts after the ME generation took charge, than it is to make the argument for “out-of-control” federal spending. Would be interesting to compare with a similar “Federal Spending as % of GDP” figure.

  19. Livermore Shimervore says:

    let me get this straight…. The Bush Cheney years produced the lowest tax rates ever…. And the largest debts (before the market crashed)….. with a fraction of the jobs created under even Jimmy Carter…
    Fast forward an ecnomic disaster later, and NOT ONE of these Tea Party types (the ones who will get tough on govt debt and govt spending) have come forward to say “medicare, social security and defense will from here on be slashed 30% across the board until the deficits are back under control.” When asked about this, all the so-called fiscal conservatives clam up. So other than religious conservatism, what is actually conservative about Republicans and their spin off Tea Party faction? It amazes me how people rail about Obama, Reid and Pelsoi as if McConell, Boehner, Cantor and (insert Tea Party flavor of the week) have committed to do anything different.

  20. RobertB says:

    Ok…I’ll bite. Instead of “Socialism”… how about “Confiscation” or “Theft?”

  21. Ole Drippy says:

    I like how the government will ALWAYS spend more than it brings in, make promises it can’t afford, and spend your money how THEY see fit. I am not a Tea Bagger, they are a little bit too much of moral entrepreneurs for me, but I don’t understand why people think it is moral to STEAL from others through voting.

    If you went to your neighbor and told him he had too much money and had to give you some, you would be arrested. I like how we simply have our politicians do our dirty work for us. Shame.

    If Bill Gates and Warren Buffett think the government does such a grand job redistributing wealth, why give everything to the Bill and Melinda Gates foundation? Why not give it to the “beast”?

  22. scepticus says:

    in a closed economy which is stagnant or growing, a government running a budget surplus will always be matched by an increase in debt in the private sector. That is an accounting identity.

    Unsurprising then that the nations runnng public surpluses or very low deficits from about 1995 onwards (which includes clintons admin, early years of new labour in the UK, ireland, australia and others), also now rank amongst the most indebted private sectors in the world.

  23. Concerned American says:

    I think the people commenting with the Tea Bagger labels are helping to make your point. Seems like all anyone wants to do today is put a label on everyone. I can assure you I am no liberal, no tea-bagger, no republican, no democrat, yet I get called all those things just trying to have a “common sense” conversation about just about anything lately.

    People are so brainwashed by television or radio and their favorite talking head they have quit thinking for themselves. This is as the dividers would say on both sides. Like everything is that simple. These talking heads apparently keep everyone from having to think for themselves.

  24. One thing to keep in mind is that the definition of “income” has changed significantly over the years. The “Reagan Revolution” significantly expanded the definition of “income” for tax purposes while simultaneously reducing rates.

  25. DeDude says:

    Livermore, the problem is that they have opinions that are neither based on facts nor anchored in reality. They are the spoiled little brads who talk about sacrifice (from others), but insist on having their cake and eating it too. The reality is that when you take medicare, social security, and military spending out of the discussion, there are no way to balance the budget without increased revenue. The magic cutting of “government waste” does not amount to much because except for those 3 big items there is not that much government spending to be cut.

    The greatest generation realized that after WWII serious sacrifices had to be made and self-indulgence put aside to pay down the debt and create a great and prosperous society. They lived with and accepted the 70-94% top rate as a sacrifice to give their children a better world. For the ME generation the concept of sacrificing or even cutting back on self-indulgence to leave something better for our children and grandchildren is a foreign concept. The most pathetic thing is that for my generation its not about sacrificing having meet on the table every day, we refuse to cut the size of that oversized TV, or having one less room to fill with useless cr@p in that house twice as big as the one our parents lived in.

  26. RadioFlyer says:


    I’m not even going to get in to whether there was “democracy” or not in the U.S. pre-1861, but what does technology have to do with “the size of the current state” as you put it? I fail to see how the “march of democracy and technology” justifies multi-trillion dollar federal budgets and national debt.

  27. flipspiceland says:

    What’s 40% got to do with anything?

    I doubt that when marginal tax rates were 75% that state, property, school, sales,county,excise,Social Security and so many hidden fees and taxes were in play as they are today.

    That chart above is biased in the extreme.

    And anyone who denies that the Socialization of losses that is occurring is either deaf, dumb and blind or doesn’t know the meaning of Socialism.

    And the government deciding which businesses, and therefore, which of our people will succeed, fail or be kept permanently on life support like Oil, Automobiles, Banking and Farming is 100% socialism.

    WTF are you all talking about?

  28. dss says:

    Good Grief. Here we have been wondering how to get out this mess and all along the solutions were right before our very eyes! God will lead us out of our indebted wilderness, and American Exceptionalism will once again be on display for all the world to see.

    “American exceptionalism is the theory that the United States occupies a special niche among the nations of the world[1] in terms of its national credo, historical evolution, political and religious institutions, and its being built by immigrants. The roots of the belief are attributed to Alexis de Tocqueville,[2][3] who claimed that the then-50-year-old United States held a special place among nations, because it was the first modern democracy.”

    Except for the immigrants part, because we do not welcome many immigrants anymore, and the fact that most exceptional Americans are now unemployed, and that 20% of our children live below the poverty line, and historical evolution has brought us the Tea Party and Rand Paul, and the banksters and corporations run the government, ….. Never mind.

  29. Machiavelli999 says:


    Let’s face it. The Baby Boomer generation has destroyed America.

  30. mbelardes says:


    I think a fair shake of tax rates would be to show the top percentage along with where that top percentage started in today’s dollars. I think that 94% rate was for AGI above ~$10 million in today’s dollars (maybe $1 million, I forget).


    Substitute “grandpa” for “dad” and I am right there with you. I’m 26. I don’t even plan on Social Security being around for me. I can’t afford a real house (just a box called a condo in CA) despite making good money. On top of that, I am going to get reamed in taxes once I hit my prime income earning years. Time for a little Generational Austerity Measures of our own…

  31. dss says:

    The answer to everything is tax cuts as we have been told repeatedly that tax cuts solve everything including venereal disease and toe nail fungus.

  32. scepticus says:

    technology infantilises us all – even while it expands our collective capability it diminishes us individually.

    Take for example an EE who trains for 10 years in education then another 10 in industry, after which he is sufficiently skilled to enginneer data transfer at 5 gigabits per second over 15cm of copper track on a PCB.

    Societally this guy is very useful, but individually he is utterly reliant on the existence of the industrial infrastructure and social welfare infrastructure. The former to ensure a contiued demand for his skillset and the latter to provide some sense of security of that demand fails to materialise.

    Also, to get a job in this sector he has to move away from home and family and community, and thus cut his natural support links. So now he needs a pension, the viability of which depends on continued growth, which in turn depends on finding new investment outlets for his savings, all while every other person is trying to do the same thing.

    Take away all that support, and bosh, no 5gbps communication infrastructure any more. Hopefulyl by now, you get my point.

    BTW, what was voter enfranchisement like in 1861 as a %age of the population?

  33. DL says:

    Whoever came up with this cartoon has no understanding of the difference between MARGINAL tax rates, and taxes actually paid (as a percentage of income). The other critical issue here is that of the tax LIABILITIES that Obama is foisting upon us. And until we know who is going to be paying those tax liabilities, we can’t say for certain how far we’ve moved in the direction of socialism.

    In the unlikely event that those who are benefiting from Obama’s policies ended up having to pay for them, it wouldn’t really be “socialism”. But unless we get a VAT tax, or a huge energy tax, the top 20% will end up paying for everything.

  34. Invictus says:


    Since when has labeling anything you disagree with “Socialism” a substitute for poltiical discourse? We embarrass ourselves as a nation to the rest of the world when we do this.

    Amen to that, brother. Sad, but true.

  35. dss says:


    Nope. It started with Reagan, thirty years ago. Tax cuts, S&L fraud, deregulation. Saint Ronnie, the fiscal conservative, never balanced a budget and almost tripled the national debt, which he handed to the Boomers to pay off. He blew up the federal government and couldn’t pay for it and cut taxes at the same time. Conservative, my ass and not a Boomer.

    Clinton, a boomer, ended his term with a surplus, reducing the size of government, enacted welfare reform, but then he was such a socialist.

    Let’s blame Bush II for his share, and he certainly was a Boomer. His administration’s systematic destruction of our country and economic system cannot be written here because it would take me all night.

    There is plenty enough blame to go around, but I wouldn’t paint all Boomer’s with the same brush.

  36. Jonathan says:

    @ Livermore Shimervore

    There have been quite a few misconceptions made on what the Tea Party movement is and who “Tea Party types” are. As a member myself, I am all for complete elimination of medicare, social security, and any other government program not created via an amendment to the U. S. Constitution.

    National Defense is one of the few programs that IS granted by the Constitution (see Article II: The Executive Branch) so I wouldn’t mind keeping that, although I agree that it needs to be trimmed down quite a bit.

    Our stance is for a smaller U.S government and a return to the Constitution being used to limit government’s power.

    A good definition of our stance is noted as follows ( is the URL I used):

    “Fiscal Responsibility: Fiscal Responsibility by government honors and respects the freedom of the individual to spend the money that is the fruit of their own labor. A constitutionally limited government, designed to protect the blessings of liberty, must be fiscally responsible or it must subject its citizenry to high levels of taxation that unjustly restrict the liberty our Constitution was designed to protect. Such runaway deficit spending as we now see in Washington D.C. compels us to take action as the increasing national debt is a grave threat to our national sovereignty and the personal and economic liberty of future generations.

    Constitutionally Limited Government: We, the members of The Tea Party Patriots, are inspired by our founding documents and regard the Constitution of the United States to be the supreme law of the land. We believe that it is possible to know the original intent of the government our founders set forth, and stand in support of that intent. Like the founders, we support states’ rights for those powers not expressly stated in the Constitution. As the government is of the people, by the people and for the people, in all other matters we support the personal liberty of the individual, within the rule of law.

    Free Markets: A free market is the economic consequence of personal liberty. The founders believed that personal and economic freedom were indivisible, as do we. Our current government’s interference distorts the free market and inhibits the pursuit of individual and economic liberty. Therefore, we support a return to the free market principles on which this nation was founded and oppose government intervention into the operations of private business. “

  37. Fred says:

    They left out George Bush Senior’s tax increase. For some reason the Politico forgot about “Read my lips, no new taxes.”

  38. dss says:


    Quit whining, there are plenty of people much older than you that don’t even have a condo in CA and no hope of getting one.

  39. call me ahab says:

    beatstreet says-

    “I assume those are simply the top marginal income tax rates over time. that says very little about the overall tax burden on the economy”

    no doubt- what people seem to forget is that there use to be numerous legal tax shelters for the wealthy- so they paid sometimes very little tax at all-

    thus the AMT- which was designed to rectify that problem-

    but people look at this cartoon and say- look- the high tax bracket was 77% under LBJ- let’s do it again-

    but how much were they really paying?

    BR- just likes putting up converstation fodder- the cartoon is meaningless

  40. quidite1 says:

    This cartoon is deceptive.

    Do state income tax rates not count? In California that adds 10.55% to the top bracket.

    And I don’t think California had a rate that high — if at all — during FDR’s presidency.

    Taking more than half a person’s income does starts to tilt the system away from a just tax rate.

  41. scepticus says:

    jonathan, a free market based on property rights has and always will be (until we all be immortal) an outcome of state intervention to establish and enforce property rights over what began as a commons.

    the initial conception of capitalism by the enterprising dutch (fresh from having overthrown the tyranny of state catholicism) and then taken up by the british empire was in its beginnings a state sponsored capitalism which prospered by annexing the property rights of foreigners. And so it remains.

    The USA was founded in the same manner by men schooled by the original european pioneers of this latest civilisational ponzi scheme, and based in essence on the confiscation of liberty from various indigenous peoples just like the dutch and british founded their freedom upon the losses of the same in india and indonesia.

    Freedom is largely a zero sum game. Each to their own free lunch.

  42. Livermore Shimervore says:

    No Tea Party politician seeking higher office could ever get elected advocating cutting social security, medicare and even a slight cut back in defense. And those are the reformers….
    Also, a NYT poll of Tea Party sympathizers thought Medicare and other FDR programs were “worth it”.
    Probably because most are closer to middle age than the local young Republicans club.
    I’m convinced that we are no different than the Greeks. Nobody wants any part of austerity. Just a lot of yelling at the town hall. You really have to ask yourself if we have any interest in supporting politicians we believe in or participate simply to denounce the other guy. The most intrguing part is that the fringe pundits like Malkin, Crowley, Hannity, Limbaugh, (can’t think of any lefties that pull in ratings) have done a fantastic job of convincing millions that there really is any difference between a Pelosi or a McConnell, an Obama or a Romney, a Bachmann or a Maxine Waters.
    The only solution is to ban all political parties. They are simply watering holes for the stupid.

  43. Just because the rates were much higher in the past doesn’t mean that anyone paid those rates. Look back at tax practices, and you find a multitude of loopholes. Just think limited partnerships in the 70s and 80s. This is why the AMT was enacted cause the wealthy weren’t paying much in taxes. Same with personal service corps – so many small business owners would create a few C corps to take advantage of lower corp rates.

    To look a chart with top rates and assume folks paid much more in taxes in the past is simplistic. We either need to step up and pay a ton more in taxes so the government can afford its spending, which I think is asinine, or we need to cut spending. Everything should be on the table, including useless wars and bases in 4oo OCONUS locations and social security/medicare. We are already finding governments are close to default with liabilities at 100% of GDP. What happens when the unfunded liabilities in the US and other countries come home to roost.

  44. call me ahab says:


    it is lock that Social Security will be changed at some point not too distant- means testing possibly- upping age requirements- payroll taxes on all income-

    all three probably- that is if people still want be able to receieve it at some point

  45. franklin411 says:

    You’re forgetting that there was a tariff in the 19th century.

  46. mbelardes says:


    Tough for them. Why do we need to raise taxes on the younger generations because the older generations have spent/borrowed us into a complete hole while they slashed taxes for themselves. Screw that. Social Security should get chopped and not start until 75. Sorry Grandma, should have thought of that when you voted for Reagan twice and Bush thrice.

  47. dss says:

    “Keep your government hands off my Medicare”, said one Tea Party member!

    It’s all well and good until they need the government assistance, like government backed student loans, or Pell Grants. How much state and federal funding do state colleges and universities receive? Let’s get rid of hospitals, police and fire departments, local public schools, jails, while we are at it. They are just more examples of government waste.

    These Tea Party people are a laugh a minute.

  48. Hit the Reset button says:

    As I type this in a windows IE browser, on a notebook running windows 7, I am reminded that none of this would be possible if Gates Sr. had been successful many years ago in convinving his son to stay in college and forego that decision to start a small business…………… Perhaps the intellegence gene was passed on through the mother?

    But I digress, I wish Gates Sr. as much success with his latest endeavour as he had many years ago.

    Just remember Gates Sr. when you write out that check for humanity, make it payable to “Bureau of Public Debt” and you will feel much better.

  49. kstills says:

    All hail the libertarian!!

    Good grief…

  50. dss says:


    Oh please. The taxes are being raised on everyone, not just the younger generation. And the boomers will be taxed higher because those who still have jobs at this point are presumably at their peak earnings.

    There are plenty of older folks who never voted for Reagan and Bush and were against tax cuts and they shouldn’t be punished. Gore got more votes than Bush did, if you weren’t in diapers and too young to remember ancient history.

    Social Security is the biggest tax give away to the rich. There should be no cap on Social Security wages just like there is no cap on Medicare wages, the benefits should be means tested. That’s just for starters.

  51. Daffyorbugs says:

    Your parents or your grandparents couldn’t opt out of the system any more than you can, short of blood in the streets.

  52. cdosquared5 says:

    Barry, your record on engaging in name calling instead of political discourse is pretty piss poor, as well, though,
    You average a reference to “STFU” juice one a week.

  53. Cynic_FA says:

    Liars, damn liars, and socialist taxasticians….

    @Dedude They lived with and accepted the 70-94% top rate as a sacrifice to give their children a better world. Don’t talk about 70% taxes in the 70′s unless you were making $200k back then and paying the tax. Tax evasion in America was the National pasttime, more popular than tax evasion today in Greece or Latin America.

    The error in this graph is the difference between top mariginal tax rate and effective tax collected.

    Do you know the tax rate on dividends in the 1970′s? It was zero because investors did not get 1099′s on dividends. Capital Gains tax? Zero, because brokerage firms did not report cost basis or gains. All of these taxes were “Voluntary” and many, if not most, investors did not pay them.

    Why were many of the the super wealthy invested heavily in real estate? Try 3-1 writeoffs of depreciation against ordinary income. There was no limit on passive loss deduction. How many businesses paid all, I mean all, of the family expenses through the company on a pre-tax basis. I had a cousin who put his unmarried daughter on the retail store payroll, no actual hours worked, to pay all her bills until she could marry a doctor.

    Offshore trusts were actually legal. When did those 50,000 UBS clients actually move the family millions to Switzerland.

  54. grcvegas says:

    also remember that for many major industries in the US, up to the 1970s the federal gov’t set the prices.

    Which was considered smart to do back then. So were wage and price controls, and my economics textbook, the leading one by Noble prizewinner Samuelson, praised Soviet style top-down command for the economy!

    wolfs crying “Socialism” forget how much a re-made world we live in now…

  55. wunsacon says:

    >> That’s why I emphasize the “used” when I say I used to be a conservative.

    Welcome to my world, Alan! Tea? Er, no. Coffee, then?

  56. grashopa says:

    Dedude – How about cutting off GM and Chrysler? Or FNM or FRE? Just these 4 already account for 100 billion this year. You do realize that the tea baggers want to cut SS and medicare right? How about the bank subsidies? BAC makes 10 billion a year alone on the interest rate subsidies – add up all the financials and thats quite a lot. Why do the democrats want to give money away to the corporations like this? Do you really oppose what the tea partys are actually about??

  57. ajani says:

    It’s not quite a fair comparison when looking at the “top marginal” tax rate over time. As time has passed, expenses etc that used to be deductible have either become non-deductible or there are phase-outs on deductions. The same “top line” income today might actually pay more tax than at a time in the past when the marginal tax rate was higher because many deductions are now disallowed.

  58. foxorrabbit says:

    Am I the only person who is bothered by this conflation of “income” as “wealth”? INCOME IS NOT THE SAME THING AS WEALTH. As long as we are taxing income instead of taxing wealth, we’ve got to stop saying “tax the rich.” Taxing the rich is not possible with an income tax. A high tax on income is a weight around the necks of people who are *trying* to get rich — the people who are already rich get to cruise along. If you want to tax the rich then you need to tax assets or net worth, not income.

    The main effect of a high income tax rate is to condemn all people to their current economic class. Everyone who is wealthy stays wealthy, and no one is not already wealthy can become wealthy. It’s called oligarchy.

  59. TakBak04 says:

    grashopa Says:
    May 20th, 2010 at 8:29 pm

    Dedude – How about cutting off GM and Chrysler? Or FNM or FRE? Just these 4 already account for 100 billion this year. You do realize that the tea baggers want to cut SS and medicare right? How about the bank subsidies? BAC makes 10 billion a year alone on the interest rate subsidies – add up all the financials and thats quite a lot. Why do the democrats want to give money away to the corporations like this? Do you really oppose what the tea partys are actually about??


    OHH….They are coming after SS/Medicare! That’s NEXT on the Petersen Agenda for the Obama Administration. Good Ole Boy Erskine Boles and that “Old Guy Commedian” Alan Simpson are chomping at the bit to “DEREGULATE the OLD FOLKS!”

    And CNBC with KUDLOW full TIME couldn’t get off how Europe was going to have to cut it’s SOCIALISM WAYS by “AUSTERITY, Budget Cutting.”

    For Kudlow and Company and his “Babes” that means? EUROPE NEEDS TO GET RID OF MEDICAL CARE/LIBERAL VACATION TIME and and other PERKS.

    Kudlow and Company raved on through the rest of the “Shows” on CNBC today with the “Babes in Blue with cleavage hanging out and much overdone Make Up enhancements” to tell us why Europe has to Delever their folks from their Socialist Programs.

    After all…Larry still thinks “Socialism = Communism” and Communists, Socialists and “Terraists” are all under our BEDS!

    Fans of “Opus” ….Do you remember his “Nightmare Closet?”

    Propaganda 24/7 on CNBC…and the folks who follow “MAD JIM CRAMER” follow it up later on. Jim’s following amonst the TeaPartier/Baggers is indisputable! He’s as crazy as they are if you listen to his “BOO YA, JIM” callers heaviste being from Texas and Zip Codes known to vote for EVANGELICALS .

    Cramer is the BEST PREACHER for FINANCES OUT THERE. Go to Church on Sunday and TUNE INTO CRAMER on Monday thru Friday, go to the Malls on Saturday (the day of rest) and then listen to the Tarted Up Evangelical Preacher in Church on Sunday. Lather Rinse and Repeat and throw in HDTV/History Channel and Propaganda News and you GOT….AMERICA TODAY!

    But…then…there are the calm collected rest of us…who don’t bother with this parade of “stuff” and we are VERY CONFUSED as to what the HELL IS GOING ON these days……. We keep seeking and read different information…and we just can’t understand the disconnect.

    How do we all MEET and make things Work Again? For Everyone?

  60. quiddity says:

    Under Reagan, the highest marginal tax rate was something like 33%. That was for the bulk of upper-middle class people. The 28% was the marginal rate for the “top earners” (over 200K/yr IIRC).

    It was always deceptive to say that Reagan had a top rate of 28%, because that gave people the impression that NOBODY paid a higher marginal rate.

  61. Cynic_FA says:

    Try a little more reality math to see why “33%” tax for a wage earner today is more than the marginal tax rate under Nixon in 1973. The tax rate on “Earned Income” in 1973 was only 50%. The highest marginal tax rate did not start until $200,000(and this was real money in 1973). The marginal tax rate at $51,000 income was only 35%. Adjusting $51,000 in 1973 for inflation you get to $250,000 today which is the “Filthy Rich” definition for the Obama administration.

    If you take your $250,000 home in a paycheck today you are paying 33% plus 2*1.45% on Medicare without a cap, plus 4% in phase outs for itemized deductions and personal exemptions.
    And the Social Security tax for wage earners is 101.4% higher than 1973 after adjusting for inflation. That’s about $6,200 extra social security or 2.5%. The 2010 wage earner with $250,000 is paying the same as a 42.4% marginal tax rate.

    You might argue that the $5 million a year earner with half in dividends and capital gains has it good today. I say that the $1 million a year earner in 1973 had 50 more ways to avoid tax altogether. How about some anecdotal evidence.

    I am looking for just one of you to say that you or Dad was making $1 million a year in 1973 and actually paid more than 50% of it in tax. Barry, ask the third and fourth generation wealthy that you call clients. How many of them had families who actually paid more than 50% of total income in tax as opposed to sheltering more than 50% of income with real estate depreciation and offshore tax-shelter trusts.

  62. moonmullins says:

    The refuge of the left … find a “label” used by their opposition in a weak attempt to discredit the criticism. How childish.

    Here’s a radical idea from a self-confessed believer in classical economics … let’s ask … what’s OPTIMAL?!!

    I know, you’ve already dismissed me as a nut. What a stupid question I ask. So flame away and embarass yourself further.

    The fact is that an increase in income tax rates from current levels is far from optimal. It will depress economic activity. And in all likelihood, it will not bring in the level of tax REVENUES that the CBO projects.

    The cartoon is also intellectually dishonest. The left-wing labels being tagged on Obama are not the result of a single policy action. Rather, they reflect the totality of his economic and social policies, from healthcare to student loans to a host of other actions, including, yes, taxes.

    The cartoon, and Obama, miss a more fundamental issue. The historical data indicates that our problem today is not income. It is spending. Spending has increased at a rate far faster than GDP or tax revenues. We need to re-align our level of spending, and insist that Congress focuses its efforts on spending programs that have a much higher return on capital, with longer-term benefits, than the majority of dopey measures that were rolled into their pork-heavy stimulus package of 2009.

  63. dr.j says:

    What a stupid cartoon. Socialism clearly no related to tax rates. The facts show that when you tax sometning you typically get less of it. The “surplus” of the Clinton years was due to increased revenue from capital gains taxes that were so low during the tail end of the tech boom.

    That increased cap gains tax revenue created the surplus. What so many of you spendaholics fail to understand is that spending and revenue are separate events. If spending continues to rise, there is a problem. If you reduce you teenagers allowance, but leave his credit card in his wallet you have the same outcome we have. Limited revenue, unlimited spending.

    Supply side only works when spending is adjusted to match revenue, hence “starve the beast.” If you do not change borrowing, you are only feeding the beast with your neighbor’s food.

    Socialism, clearly, has nothing to do with tax rates. It is just the philosophy of how much you want government to solve your problems while you sit on your ass.

  64. dsawy says:

    Since the same time when labeling any disagreement with the current administration as “racism.”

    What isn’t represented (and never is mentioned by advocates of the 1954 IRC tax rates) is the number of and types of deductions available in the 1954 tax code, nor the inflation-adjusted incomes required to meet the top marginal rates under the 1954 IRC (like over $7 million).

    As for those like Gates’ father: He needn’t just complain. He can actually put his money where his mouth is. All he needs to do is write out a check for however much he wants to pay to the US Government, payable to “Bureau of the Public Debt.”

    Then he should put it in an envelope, seal it, lick a stamp and apply it, then write the following on the outside of said stamped envelope:

    US Treasury
    Attn Dept G
    Bureau of the Public Debt
    P. O. Box 2188
    Parkersburg, WV 26106-2188

    Funny thing: I never see these rich, unctuous pecksniffs actually putting their money where their mouths are.

  65. Derek says:

    Barry, you are so above this superficial cartoon. As you know, 1) nobody ever paid FDR’s max tax rate. He built in plenty of loopholes for his friends, the powerful. 2) The drop during the Reagan era was due to Rostenkowski making a covenant with Reagan to eliminate the loopholes and create a more honest top rate. 3) The Bush rate was never 33%. The marginal rate as one transitioned from bracket to bracket was higher. 4) The 40% rate of Obama is needed to support a fractional ownership of the US economy that exceeds anything this country has seen in the past. THAT high fraction is what people are calling SOCIALISM. And yes, Reagan and Bush were socialists also. They just happened to escape the tag among all but libertarians and constitutionalists.

  66. subscriptionblocker says:

    Loved the image – it’s a keeper. So much better than the wiki chart.

  67. subscriptionblocker says:

    Interestingly, found an old VHS tape a few months ago. Peter Jennings – “Taxes and the family” circa ~1980.

    They were contrasting the tax burden of families during the 1950s vs 1980s.

    I kept it. Now H.264 in an open file container format.

  68. Blah, blah, blah… Just look at the cartoon chart, and then overlay the stock market starting in the early 1980′s as the tax cuts took effect. Then tell me how this strategy blew for everybody.

  69. dss says:

    No, overlay the interest rate charts, not the tax cut charts. The 30 year bull market in bonds was just about to begin. Tax cuts do nothing but add to the debt.

  70. elmerfudd says:

    Gates, Buffett, Ritholtz, et al are free to donate whatever amount they want to the federal government. The problem comes when they want to forcibly extract money from my pocket to accomplish their own particular goals, which they somehow feel are more noble than my own.

    dedude, let’s correct something about the “Greatest Generation.” It was not the WWII generation. That falsehood was coined by Tom Brokaw to sell a book. The Greatest Generation was the Revolutionary War generation – they freed this country against massive odds, at great personal risk, and created a new, marvelous (though not perfect) political construct that has positively impacted more people in human history than any other. The values and aspirations of that true Greatest Generation are betrayed by the unchecked “beggar thy neighbor” (and his children) policies of politicians and the dupes who vote them into office.

  71. Snickers says:

    Cheers for this. Makes it pretty obvious why Reagan was sainted while driving up debt; also why Clinton was so hated while balancing the budget.

    When I moved to Japan in ’87 it was unimaginable that unemployment there would be higher than in the US in ten years’ time. I remember well the moment I first heard the voice of Rush, hatin’ on Clinton in my mother’s kitchen, seems it was about the time those two lines crossed.

  72. mbelardes says:


    “Let’s get rid of hospitals, police and fire departments, local public schools, jails, while we are at it. They are just more examples of government waste.”

    Yeah, that’s exactly what is going to happen but not because they are waste but because the funding for them has been squandered into oblivion. Not sure what state you are in, but in CA that is exactly what has happened.

    I don’t care if we have a “Socialist” country and I don’t even care about paying fair taxes but to keep increasing taxes (and now they are coming up with “fees”) because a bunch of morons in government can’t spend money wisely and now borrow indefinitely with us as collateral. Surely you see a problem with that.

    Probably not. The rest of your comments are one side of the same tired points we’ve been hearing forever from the rest of the Politicos…

  73. [...] – A little historical perspective on the top (US) tax rate. [...]

  74. basquebob says:

    @elmerfudd you have a funny sense of history, but here is a bit of history that you probably didn’t know or rather ignore: George Washington was willing to send the army after those that didn’t want to pay taxes “The Washington administration responded by sending peace commissioners to western Pennsylvania to negotiate with the rebels, while at the same time raising a force of militia to suppress the violence. The insurrection collapsed before the arrival of the army” You know how the founding fathers paid for the revolutionary war? Taxes. They didn’t advocate no taxes, just no taxes without representation.

    You metaphorically wrap yourself with the flag and yet you think your own causes are more noble than those of your country, talk about being dissonant.

  75. flipspiceland says:

    @Hit the Reset button

    Don’t know if your were being sarcastic or not, but the chances of having a very smart son increase immensely with issue from a very smart mom.

  76. Carse says:

    Yep, crowding out at any government level is socialism. How about increasing government cuts – fire a few more government employees — especially the ones that caused the USA mess. Notice I say USA mess, that’s intended to paint with a broad brush.

    There just are not enough words in the English language to express the dire straights our meddling government has put us in.

    Domineering Ideology is the root of all evil…. Greed is manageable, The Constitution is our manager(in an imperfect world).

    So what political party loves to dominate everything? Ask the markets!

  77. rj says:

    ^ Whether a kid is smart or not does not so much depend on genetics but depends on whether he had good parents raising him or her that took an interest in his or her development.

    “This is hilarious because they should go tell the European Union that the EU should not make countries with high debt increase tax rates.”

    Well, that’s going to lead to a very bad decade as growth gets stifled and decline even more.

    We are well and truly in John Maynard Keynes’ long run right now. All the bills came due that were put off by politicians in the past and we now have to pay them. This is why the worst generation in this country’s history is the Baby Boomers, and fittingly that generation has been running this country for the nineties and naughts when all our current problems were created. They voted themselves everything under the sun and didn’t want to pay for it. They deserve to have their Social Security cut.

  78. davver1 says:

    We all know if taxes go up it won’t be on the rich. It will be on the “rich”, i.e. middle and upper middle earners just trying to get a decent house and send their kids to a decent school. Put yourself through school and worked your way into a decent career, well pay up.

  79. purple says:

    Regardless of the labeling, without some serious income redistribution, there will be more market instability and more weak growth. Going back to ‘The Great Crash’, income inequality has been linked to the kind of volatility we are seeing right now.

  80. elmerfudd says:

    basquebob, I am not advocating no taxes. However, they should be for clear public purposes – roads, national defense, necessary regulation (not political “photo op” regulation or regulation enacted because a federal agency is not doing their statutory job – ie the SEC).

    Paying for your particular health care, retirement, housing, education, income, automobile, etc. is not a clear public purpose. That should be left to you and whatever charity is generous enough to voluntarily provide for you.

    No honest reading of the Constitution or the historical record of the period can show any intent for anything other than ‘limited government.’ Taking half your income or more through various direct and indirect taxes hardly reflects ‘limited government.’ Saying that someone can afford it is no defense. A lot of people can “afford” to give blood – should the bloodmobile park outside your house every month and everyone be frogmarched out to “give” blood?

    From the Wikipedia entry you cite: “The tax effectively favored large distillers, most of whom were based in the east, who produced whiskey in volume and could afford the flat fee. Western farmers who owned small stills did not usually operate them at full capacity, and so they ended up paying a higher tax per gallon. Large producers ended up paying a tax of 6 cents per gallon, while small producers were taxed at 9 cents per gallon.”

    Note the result of the tax, aimed at individual collections. It discriminated by business size and economic location. It would have been much better to stick with traditional forms of taxation ie import tariffs. Much easier and less intrusive to collect, and less meddlesome in terms of trying to accomplish political or social goals. Instead, the tax ended up causing social unrest and political division. It’s application was uneven and it was eventually abolished. Overregulation and clearly intrusive taxation erode respect for the law and government and encourage widespread evasion.

    Perhaps the line that should provoke the most thought in the entire article: “Although Hamilton’s principal reason for the tax was raising money to service the national debt, he also justified the tax “more as a measure of social discipline than as a source of revenue.”[1] Most importantly, however, Hamilton “wanted the tax imposed to advance and secure the power of the new federal government.” “

  81. brandco says:

    The problem with this cartoon, and the argument that the tax rates are lower today because the highest marginal tax rate is lower today, is that it ignores the number of tax brackets.

    Today we have five tax brackets. In 1956 there were 27 tax brackets, 27!. That top bracket in 1956 was 91%, and it applied to income over $300,000 (1956 dollars) which is $2,404,000 today. In 1956, in inflation adjusted dollars, the 300,000th dollar (the top bracket in todays money) would be taxed at 62%, not 91%. Still higher, but not as dramatic. See

    You cannot compare top marginal rates when the marginal level of income subject to those rates is different.

    What the cartoon chart says to me is that maybe adding more tax brackets it is a better way to raise revenue than raising the top marginal rate.

  82. DeDude says:

    Grashopa; GM, Chrysler, FNM and FRE got loans that at the worst will turn into one time expenses. You have to deal with recurrent expenses and reduce them about 800 billions to attack the deficit and start paying back the debt (and that is if we ignore the unfunded liabilities). I am not sure what you talk about with interest rate subsidies, but I doubt that they are showing up as a line item in the budget so cutting them (and that is fine with me) will not improve the national budget.

    Personally I am against giving 0% interest loans from the Fed to the banksters so they can charge consumers 25% on credit cards (or gamble with the money in derivatives). I think every state should have a state bank that get its money from the Fed, and loans money to the state itself and to consumers (at a rate slightly higher than the Fed rate, to cover overhead). But when people hear that kind of idea they pull the old buggy man out and scream Soci@lism.

    I am very much against a lot of the stuff the tea baggers want, including the cuts in SS and medicare that some of them support. I agree that we need to cut the national debt. But without raising taxes that will not be possible – so until they start talking about what taxes they intend to raise, they cannot be taken serious. I have yet to see any of them come up with a specific plan containing the kind of draconian cuts that it would take to balance the budget purely on spending cuts alone. Morally I also object to the idea that we should throw grandma out on the street, in order to avoid asking the rich to pay a fair share of their wealth to the common good. Remember that social security is poverty insurance that we all have paid for, and if you cut that we really are taking about confiscation.

  83. webspin says:

    Thank god this cartoon set me straight. I was about to believe my lieing tax statments that claim I pay 70% of my 55K self employment income to the government. 28% fed 15% soc sec, 5% state 6% sales tax, 10% proprty tax, $1000 gasoline tax, $220 “fee” for plates, dozens of exise taxes, tarrifs and I’m not even counting my portion of the borrowed taxes (budget deficit) that have yet to be paid.

  84. triplec says:

    “””mbelardes Says:
    May 20th, 2010 at 6:34 pm

    Substitute “grandpa” for “dad” and I am right there with you. I’m 26. I don’t even plan on Social Security being around for me. I can’t afford a real house (just a box called a condo in CA) despite making good money. On top of that, I am going to get reamed in taxes once I hit my prime income earning years. Time for a little Generational Austerity Measures of our own…””””

    What a bunch of whining spoiled little craps…. I am in my middle forty’s and don’t ever remember to many folks buying homes in their twenty’s. It was unheard of… You needed to save for the 20% down payment and start thinking about buying a home in your thirties.

    What is up with this younger generation? They are so completely spoiled thinking they deserve the world in their twenties.. Who do we blame here? Their parents?

    Its not the grandparents who need to sacrifice it is the parents of the spoiled brats… These are the parents who believed in “time-outs” and thought it was cute when their kids ran around restaurants. This is what we have now.. 26 year olds who think they deserve to to buy a house with 2% down with 5 bedrooms..

    It is ugly..

    Do these kids understand these folks spent 40 to 50 and sometimes up to 70 years paying into social security and Medicare? Do they even get it?

    I lived in a box until 35 when I paid off my student loans… Get used to it kids…

  85. Brett Tibbitts says:

    Reading many of the comments to this posting on your blog is more evidence of this country’s inability to have a debate. Many of those left of center who agree with this cartoon’s poke at those right of center have made comments right here that don’t help the discourse – deriding comments about those stupid, evil teabaggers. And the left does just as good a job as discounting those who disagree with their agenda – if you disagree with gay marriage, you’re a “gay hater” or if you disagree with open boarders you are faced with signs stating “stop the hate”.

    The truth is that we are in civil war in this country and have been for a while (it’s just a war of ideology instead of a war of guns or riots). So far there is no leadership interested in trying to stop the war. some thought Obama might try, but he is just as political if not more than everyone else.

    And by the way, does anybody in their right mind argue that70% – 94% top brackets are the beginning of a discussion on anything?

  86. basquebob says:

    @elmerfudd, spin it as you will, but you were arguing “The values and aspirations of that true Greatest Generation are betrayed by the unchecked “beggar thy neighbor” (and his children) policies of politicians and the dupes who vote them into office.”, and I showed you what the “Greatest Generation” was willing to do about taxes.”

    As you can see, some of the founding fathers, including Washington, were willing to go to great lengths to collect those taxes and expand the powers of the federal government, something that flies in the meme of today’s teabaggers.

    I could easily argue that health care and education are “clear public purposes” because sick and uneducated people can not defend or advance the interests of a country among other things. You would like to leave up to charities to take care of it. In other words, make people beg for what they need. That does so much for people’s sense of dignity (sarcasm). A lot of charitable organizations are nothing but scams that exist to enrich the people that run them and you want us to rely on them. I don’t doubt you will try to argue that many in government are also corrupt, and they are, but they are also more accountable.

    Allow me to make some points about the Constitution; it provides for a way to elect governments, when those elections are held, and ways and mechanisms to change the Constitution. We got to where we are today by the processes provided by the Constitution. You don’t like it? Fine, use the Constitution to make those changes happen, but the argument of some today that the Constitution has some how been usurped by some obscure socialists flies in the face of reality. And finally and worthy of repeating, the most reavealing thing to everybody should be the fact that the founding fathers provided for ways and mechanisms to change the Constitution. It is a testament to their greatness that the founding fathers recognized that things change with time, that the needs of a nation change over time and that their intention was to write a living and adaptable document.

  87. thegold says:

    How much has the top tax threshold changed over the years?

  88. basquebob says:

    @webspin, You have 2 problems 1) you are only making 55K and 2) you need a new accountant. You hit the nail right on the head: the middle class is getting squeezed.

  89. Investradamus says:

    Barry, you should know better than this. The top marginal rates are currently half or a third as high as they were in the decades before the 80s, but there were also about 25 different tax brackets back then compared to 6 now and the income threshold for the top marginal rate, in real terms, was orders of magnitude higher than it is today. Example:

    2010 top marginal rate for married couple filing jointly: 35.0%
    2010 top marginal rate income threshold for married couple filing jointly: $373,650

    1963 top marginal rate for married couple filing jointly: 91.0%
    1963 top marginal rate income threshold for married couple filing jointly: $400,000
    1963 top marginal rate income threshold for married couple filing jointly (inflation adjusted): $2,849,791

    1941 top marginal rate for married couple filing jointly: 81.0%
    1941 top marginal rate income threshold for married couple filing jointly: $5,000,000
    1941 top marginal rate income threshold for married couple filing jointly (inflation adjusted): $74,152,721

  90. keynesian_supernova says:

    This whole stream is ridiculous and proves that people are stuck in their own echo chambers. First of all, spending rose much faster than revenue. The Federal Government today takes from Americans’ pockets more than $2.5 trillion per year. In real dollar terms, this sum is 50 percent higher than what
    Bill Clinton’s government took during its first year in office and 25 percent higher than what George W. Bush’s government took during its first year. So revenue did still go up even in the face of tax cuts. What amazes me is that someone actually thinks that someone paid 91% of their income in taxes. What idiot would work for the government to take 91% of it? These arguments but forth by Politico and Barry are below their collective intellect and they should be the one’s ashamed of their blindness.

  91. DeDude says:

    Webspin; you are spinning a little to much. You claim to pay 28% on an income of 55K or $15,400 in federal income tax? Last time I checked the tax-tables you pay about half of that for a single person, no kids, no deductions.

    Investradamus; so lets go with the 1963 rates and be generous to say 91% on income over $3 million. Now what were the other brackets?

  92. engineerd1 says:

    The whole left-right socialism vs fascism name calling thing is of course for the knuckleheads. The point here is that the problem with health care is there is a broken market, and his answer is to damage it further….the problem with poverty is broken values, and his answer is more soul-destroying handouts, the problem with Wall Street is its partnership with government, and his answer is to tighten the relationship….. in every arena his answers are straight from the european social democrat handbook….You can call it whatever the heck you want. But the real dummies here are the for real socialists that have thrown the o’s off the bus because they couldn’t get it all done in the first year. I don’t care what you call him, but the fact is that the o is all that the most fervent socialist could wish for, and the change (i.e. damage) his is bringing could only go faster if he had come in in a bloody revolution. And those of us who oppose him, are as serious as can be about his utter defeat, along with all who sail with him.

  93. diogeron says:

    Good cartoon…A bit of perspective is always helpful in attempting to set the record straight for the extremists on both ends of the spectrum, not that it usually persuades those folks. I do think that the 28% top marginal rate for Reagan is misleading, however. It is my understanding that the top rate was 50% for six of his eight years in office and only hit 28% in the final year of his presidency.

    That means if Obama is a socialist than Reagan was a communist for much of his term. Of course, such characterizations are nonsense (as was the charge from the extreme left that Bush was a “fascist” and a barrier to critical thinking, but that doesn’t seem to matter to some people who seem more interested in scoring political points than actually understanding what’s really going on at any given point in the political cycle from a public policy standpoint.

  94. Bondo says:

    You ignorant liberals can continue this love-fest until 2012, but it’s quite obvious you understand neither tax policy nor the complexity of our tax laws.

    This cartoon is just that; a cartoon. The graph is misleading, at best, because those relatively high tax brackets that reached 70 percent and beyond were easily avoidable in those years with transferable losses, most commonly in the form of passive loss partnership interests (otherwise known as tax shelters). Corporate taxpayers could “traffic” in tax losses by purchasing inactive corporate entities with attached NOL’s for pennies on the dollar. Likewise, high-net-worth individual taxpayers could invest relatively small amounts in exchange for a passive interest in a real estate partnership that threw off large losses. These “passive” losses back then could offset “active” income. This also explains diogeron’s point regarding Reagan’s mere 2 years under the 28% bracket. The sweeping tax code overhaul that put a stop to loss trafficking was TRA 1986 (for those of you on the Left Coast who didn’t pay attention in history class, this was during Reagan’s term).

    So, to compare a marginal rate in 1960 to one today may be interesting enough for a cartoon, but the comparison is one of apples and oranges, unless you take the rest of the tax code into account. But, by all means, go ahead and keep the party going here. And, keep up the tea-bagger name calling if it makes you feel better. The ironic thing is 99% of true tea-baggers are liberals.


    BR: Dude, its a cartoon. Get over your self . . .