Restore the Old Top Tax Bracket

Median IncomeThe graph on the left shows the median family income over the last 35 years. What you notice is that incomes have not increased much over this time period: roughly $5,000 or 10%. That is far far far less than the per capita increase in income over that same time. The reason for this is that almost all of the gains have gone to the top—the very top mostly.

Let me suggest something: we should raise the top income tax bracket. When Reagan came into office, that bracket was 70%. It was lowered because of “trickle down” economics—the idea that if the rich did better then everyone else would too. That hasn’t happened. It turns out—Quelle surprise!—that lowering the taxes of the wealthy just makes the wealthy even more so and doesn’t do a damn thing for anyone else.

Before Reagan, the the top tax bracket hadn’t been less than 70% since 1936. What’s more, since 1917 it had only been much below 70% during the years just before and after the start of the Great Depression. So clearly, as a country, we seem to think that 70% is about right for the top tax bracket.[1]

Given that lowering the top tax bracket from 70% to 35% has at best done nothing good for the country as a whole, I think we should return to the old tax bracket. All we have to gain is a larger degree of economic equality.


[1] Contrary to what a lot of people think, this does not mean that people with a lot of income pay that amount. This is a marginal tax rate. They only paid this on the income they made above what is now over a half million dollars.