Brent and I were discussing this Saturday night. Scroll down near the bottom of this page to see the history of the top tax bracket.
http://en.wikipedia.org/wiki/Income_tax_in_the_United_States
How fiscally “responsible” of us to have rates at 80-90% between 1940-1945 when we were funding a war. I’m guessing this was just (i.e., justice) because the top earners were probably those associated with the military-industrial complex and benefiting the most due to the war (probably needs fact checked). Compare that to what Reagan did in 1981 (70% down to 50) and then in 1986 (50% down to 35%) then Bush did in 2003 (Bush: while funding two wars). Fiscally “Conservative”? Someone needs to define this for me, because I don’t get it.
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ReplyDeletehis email is likely a continuation of a onversation started on Saturday and finished on Sunday (I remember being surprised about Reagan's drastic tax cuts on Sunday but Jarrod says Saturday).
ReplyDeleteI want to add that learning this single detail helps me understand a whole hell of a lot about the last 20 years. Ronald Reagan and the legislation that was enacted under him with regard to tax code can and I think should be understood to contribute not just to the bubble of the late 90s but the mini bubble of the early 2000s and the recent 2008 bubble. This is highly dangerous and we can expect this bubble/bust hyper-trend to continue if the richest amongst us are not dis-incentivized (sp) to take risk (which I believe a 90% tax on the richest is likely designed to do, among other important things). The fact that this has not been brought up really anywhere I've been reading (outside of FT) or watching (perhaps once or twice on Bill Maher, BUT not specific about the tax law itself, only anti-Regan rhetoric) cannot be a good sign.
With that said. If you have money and understand that these mini-cycles are likely to continue (given the kind of legislation that is currently being proposed vis-a-vis FDIC/NYSE oversight without fundamental law change, see FT editorials from last week and likely more to come this week). This means that we would want to invest money in almost any sector. We've likely missed the boat (bottom of stock market seen around March/April) this time as if we have any money anyway, but next time we'll be more careful I imagine.
This is a good catch, Taggart.