The One Answer: Tax the Rich

[marmar]

from Consortium News:



The One Answer: Tax the Rich
September 26, 2011

Exclusive: When President Barack Obama suggested a minor adjustment in tax rates for the rich – to make sure they pay at least the same percentage as their employees – Republicans cried “class warfare.” But higher taxes on the rich may be the only way to rebuild the middle class, writes Robert Parry.

By Robert Parry


It is curious that the American Right, which waxes nostalgic for the happier days of the 1950s when the United States was supposedly more moral and more united, ignores one of the central reasons behind that middle-class era: very high taxes on the rich.

Granted, some on the Right may love the Fifties because it was a time of racial segregation and second-class status for women. But what arguably made the era work was the fact that the U.S. tax structure “disincentivized” greed by ensuring that excess wealth was mostly recycled back into the Treasury for use building the nation and supporting research and development.

During Dwight Eisenhower’s presidency the top marginal tax rate – what the richest Americans paid on their top tranche of income – was around 90 percent. In the 1960s, under John F. Kennedy, that was lowered to around 70 percent, but that rate still meant the rich had a limited incentive to be greedy since they wouldn’t get to keep most of their extra money.

All that changed with Ronald Reagan’s presidency and his slashing of the top marginal tax rate by more than half (before it was adjusted upward slightly late in Reagan’s years and then during Bill Clinton’s presidency before being reduced again to 35 percent under George W. Bush). ..........(more)

The complete piece is at: http://consortiumnews.com/2011/09/26/the-one-answer-tax-the-rich/