Late Weird Update! Time To Tax The Ultra Wealthy Appropriately

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One of the most pernicious frames the Republican Party and Grover Norquist have ever placed on our nation is this idea that the rich should not be taxed at much higher levels than the rest of the nation. This frame is so well placed it has become nearly and article of faith for the nation if we some how put a significant amount of tax on those who can most afford it this punishes the whole nation. The Dog thinks this is flatly insane.

Originally posted at


So who says we are shouting down a whole or only talking to ourselves? Today the Dog got an e-mail from the Neil Cavuto show on Fox “Going out of” Business Network asking if he would like to be on the show to talk about raising taxes on the rich. After thinking it through the Dog has turned them down, why be a chump they can treat like a punching bag? If this were one of the Dog’s signature issues it would have been different, but since this was a one off essay, it is not worth outing the hound to look like a putz. Still we are getting attention on our humble blogs, so as Buhdy says “SHOUT LOUDER!”  

It is time to start talking about the fact we must tax the rich as a considerably higher level than we are now, if we are to get out of the mess we are in financially. It is not like we have not seen this kind of situation before and have not taken exactly that step. First a little history; during World War II our deficit was 30% of GDP, even given the differential between 1940’s dollars and today’s dollars that is a hell of a lot of money.

This is in a nation coming off the Great Depression as well, so there is a lot of money the Untied States had borrowed which had to be paid back. In order to do that, starting in 1951 all income over $300,000 was taxed at 90%. To be clear the income below that level was taxed at lower levels, based on our graduated income tax, so it was not like you were in a 25% tax rate up to that number and then bang, you are paying 90%. For each of the graduations you pay the rate up to a max, and then you pay a higher rate on income above that level and up to the next level.

In the 50’s we had 24 graduated brackets. This allowed a higher and higher level of tax up to the 90% at $300,000 and above. Which makes plenty of sense, when you think about the fact the lowest bracket when from $0 to only $2000 and was at 22.2%. Everyone in the nation was paying to fund the cost of our war and our debt, as a nation should do, but everyone was paying according the amount of money they earned. Just to give you a little idea of how much $300,000 was in the ’50’s it would be equivalent to $6,390,000 (using a nominal GDP per capita calculation, you can find it here ).The Dog has to ask is there anyone out there who does not think people who make 6.3 million a year of more should not pay something above 50% on the money over that level?

Today we have only five tax brackets and they top out at 35% at 372,000. This is due to the Republicans for years claiming the tax code is too complex and when they go to reduce complexity, they do it not by eliminating tax credits or loopholes, but by cutting the number of brackets and bringing the brackets down. This has been going on for decades. As late as 1980 we had a 70% top rate at $215,000. During this same period of time we have seen money, private money, become a major factor in our political discussion with the founding of the Wingnut Welfare think tanks like the American Enterprise Institute and the Heritage Foundation. These combined with the self-funding candidates on the Right and Astroturf “public interest” groups have helped to keep the Conservative agenda sailing forward for far longer than it should have been able to.

So, we come to the place we are today, a nation with massive debt and a strong need to spend more money in order to provide what every industrial nation in the world but the United States provides, national health care for all its citizens. At the same time we have decades (since 1987 when the top tax rate fell to 28%) where the rich have been getting richer just because the nation no longer taxed at 50% in the top tax rate. This is no longer an acceptable state of affairs. We need to have the wealthiest Americans, who, lets face it get a disproportional amount of the benefit of being American, pay their fair share!

Lest anyone think we would be soaking these ultra wealthy, remember that if you had 5 million dollars in one place at one time, at 3% earnings in bonds it would return $150,000 a year. This is twice the median income in the nation at this time, so the Dog is pretty sure they could get by when they are earning 5 million every single year!

We have to be rational about our tax policy. Many people earning way above the cap the President has set for new taxes ($250,000 annually) will tell you they are paying too little. There are, of course many who will tell you they pay too much, but the reality is they do not, not even close to too much. We need go back to a tax system that does not have so many ways of cheating it. We need to reintroduce higher brackets above the ones that will come back into existence in 2010 and 2011. It is clear that cutting taxes and cutting taxes and cutting taxes is part of the reason we are in the hole we are in. This means we must recoup those taxes and do it for some time if we are to pay down our debt and get on firm financial footing.

That the ultra wealthy pay more for this is only fair, after all they got us in to this mess with policies they favored, and they got massively more wealthy doing it. The bill is due and they are the ones who should shoulder the load, just like the rest of their fellow citizens.

The floor is yours.

One house keeping note; all the tax rates for every year can be found at the Tax Foundation. Sure they are a conservative group, but they do provide good accurate date on the historical tax rates. They just draw the wrong conclusions form the data. You can find the tables for this article here.  


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  1. that is coming so we should start to think, write and talk about it.  

  2. Starting in 1951 all income over $300,000 was taxed at 90%.

    Far past time for the 90 percent tax rate to make it’s return.

  3. …even be some oomph in it politically.  

    The ultimate question for me becomes, is America still governable?  Or are the interests which comprise it, as a country, too diverse and entrenched for successful and generally healthy policy?  Every country probably goes through such periods, but it isn’t getting better.

    I was thrilled to see the house put this out there.  

    I do think that as liberal folks, we should consider a very civil liberarian, anti-tax stance for small business owners: a bubble in which one can make good, and only face extreme tax rates after it has been established for some time.  It was never about Joe the plumber as such, and very few lefties get the total terror of meeting a payroll when next month is coming due, or what it means to start a business and pay confiscatory tax rates on one’s first few dollars.  But then, that’s like wishing for a pony AND extra frosting.    

    • Joy B. on July 16, 2009 at 00:35

    …those who make a million or more a year at LEAST 50% above that point. I agree startup companies should have tax grace for five years, review after that. Established corporations manage to get breaks all over the place, pay nothing, get corporate welfare. They should be taxed as if they’re the “corporate citizens” they pretend to be, just like the rest of us citizens. And windfall profits should always be taxed at high rates. Even oil companies.

    And when are we going to start taxing the profits of the Wall Street players?

  4. What a factual article. Thanks for the nice update. Keep it up! But aside from that breaking and sizzling report let me impart something new concern to you .Enterprising people looking for the next generation of energy drinks should look at  If you head over to (that’s how you know a product is authentic and really works – when the name is misspelled) you’ll notice the company highlights the inclusion of the acai berry.  Acai berries are heavily laden with antioxidants, (in amounts greater than tea, but less than red wine – and wine is far more fun than acai) compounds that supposed to ward off aging, prevent disease, and aid in weight loss.  If you sign up for the Efusjon energy Club, you can sign up to sell Efusjon energy drinks via direct sales.  Maybe it’s worth some quick cash to sign up on

  5. In all the talk about tax rates, something I hear very little about is the tax rate for corporations. We have all heard, however, of the obscene profits posted by the oil companies: double digit billions/quarter. Yet they are getting tax refunds, because of the subsidies they receive, and loopholes in the tax code. I remember reading that back in the mid-fifties, the corporate tax rate was such that corporate taxes accounted for about 45% of total taxes accrued by the government. The same article also said that now it is somewhere around 5%. Sorry for the fact that there is no link, but I am fairly certain of the facts, the article was mainstream enough that I didn’t doubt the source, nor the content.

    So maybe it is time to focus on our corporate tax rates instead of just the personal rates. Bring the rates up for the uber wealthy of course, but get the source of the wealth back into the tax paying bracket and a lot of the dissension will evaporate. Just about everybody will get behind taxing the oil companies, don’t ya think?

    Conventional wisdom says that if the taxes on corporations are raised, the corporations will go off shore, and there will be no tax revenue from them. Simple solution, for extra-national companies that want to do business in the USA, pre-pay taxes based on the previous quarter’s performance.

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