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Discussion: (17 comments)

  1. If memory serves, the first two recessions were immediately preceded by a year when the federal revenues were at or above 19% of GDP.

  2. Kirn Dhaliwal

    It is important to remember that this was the time of Bretton Woods where the dollar was stable. This was a period of low inflation. And with the removal of exchange rate risk businesses were able to establish long term contracts.

  3. Sharmarke

    “At the end of World War II, the United States was the dominant industrial producer in the world. With industrial capacity destroyed in Europe—except for Scandinavia—and in Japan and crippled in the United Kingdom, the United States produced approximately 60 percent of the world output of manufactures in 1950, and its GNP was 61 percent of the total of the present (1979) OECD countries. This was obviously a transitory situation.”

    Other nations weren’t growing then largely to the political constraints imposed by Bretton Woods, as well as the lack of Keynesian economic policy.

    The US wasn’t the only economic power soaring; West Germany, Sweden, New Zealand, Japan, Great Britain, France, and Canada were all booming during the post-war era. All of these countries had at the time strong unionization, high tax rates, strong public investments, and the basic bargain linking pay to productivity.

  4. This post is nuts. Everyone knows that in the 40s and 50s people didn’t pay even half of the % of tax required because shelters were all the rage. Im tired of people who pay NO taxes telling me I should pay more taxes… Oh and that I should pay more for my health care if I make more money?!?!? What the hell is wrong with people?

    1. James Barringer

      You are absolutely right. My own grandfather, who was pretty well-to-do, invested in order to acquire not profits but losses – through things like energy limited partnerships. He also built a farm as a as a tax-shelter.
      High taxes create a perverse mindset of generating business expenses for their own sake because – what the hell, the government gets pretty much all the money if you don’t.

  5. Ofcourse over simplified answers are never good although the big picture may be illustrated with the game “monopoly”. We seem to be at the stage of the game where it is clear who are the winners and losers and the end of the game is soon. The question should be how can we keep the game going and if the winners take all, can they sleep at night?

    1. End Wage Slavery Now

      “We seem to be at the stage of the game where it is clear who are the winners and losers and the end of the game is soon. The question should be how can we keep the game going…”

      My question is, when you can see how one-sided it is, how tilted it is in the direction of the already-overprivileged, why on earth would you WANT to keep the game going? It’s a rigged game that benefits a tiny percentage of the population. Unless you’re part of that uppermost 1% to 5% you’re working against your own interests to keep the game going. A better question is “What can we replace this horrific wage slavery economic model with that will benefit the vast majority of the population rather than a tiny slice of it?”

      The answer to that is direct worker ownership of the businesses, where every worker is a part-owner of his workplace, getting a share of the profits and able to elect his managers. Where finally workers have an incentive to work harder because they’re finally getting something out of their extra effort besides just more fatigue rather than working their guts out to make someone else richer.

  6. Michael Maley

    The problem is we aren’t asking for 1950’s tax rates dipsh*t. We are asking for Bill Clinton like rates. Just shut up! Please! Your killing us.

  7. Does someone want to explain this to Paul Krugman?

  8. Harold Harold

    I’ve been hearing this catchphrase from liberal friends the last few weeks about 91% tax rates during “prosperity”. I simply respond that I’m fine with returning to 1950’s tax laws if we also return to 1950’s spending (especially entitlement spending) levels as well.

  9. The universal, democratic prosperity that Americans now look back to with such nostalgia was achieved only by a colossal reigning in of markets, by the gargantuan effort of mass, popular organizations like labor unions and of the people themselves, working through a series of democratically elected governments not daunted by the myths of the market.

    We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.

  10. Eisenhower would be a progressive in today’s Republican Party.He set the stage for growth & efficiency through infrastructure spending.The expansion of the US highway system was a brilliant project for interstate commerce & trade expansion.

  11. Great article. The other point is, if taxes were raised on the rich with Obama in office, the revenue wouldn’t go for deficit reduction, it would just mean more spending.

  12. Ken Hockensmith

    After reading the article and the numerous posts, it puzzles me why noone cited what these supposedly economic crushing taxes were used to initiate for all americans, especially those in business. The interstate highway system. This massive undertaking created jobs all over this country, it provided wealth to those in business on a number of levels; expaning markets, creating new opportunities for business, as well as giving rise to increased tourism. Its hard to argue that taxes paved the way for for increasing economic growth. Its not the taxes, its how they are used.

  13. The highest tax rate needs to be raised to about 50%, but also the loopholes need to be eliminated and the minimum wage needs to be raised to $15 per hour at least so that more people can participate in economic process.

    1. Jeffrey Michael

      Larger corporations with high profit margins could be targeted with a $15 per hour minimum wage but across the board…. That would kill the smaller guys and increase prices for consumers. Before any of this can be implemented, the trade imbalance needs to be fixed; corporations manufacturing in other countries should sell to those countries and not be allowed to import those products back home where they closed their plants. NAFTA, as we thought in the beginning, isn’t working for us at home. Other nations only benefit from us in too much of a big way while our markets collapse. We must begin to produce what we consume and you will see jobs like chickens in a Tyson barn yard.

  14. The problem is that our ultra-wealthy are paying 11% average Fed rate, while the 1%-0.1% are paying >30%. Supply side didn’t work. It was a sham created by the 0.01% for the 0.01%. Trickle down has sucked massive amounts of wealth out of middle-class households and into the pockets of the 0.1%. All the wealth has trickled UP. Tax code is the primary way (among others) to re-balance our socioeconomic emergency, but (as Piketty says) we can’t do it unilaterally. It’s called “tax competition” — many countries followed America’s lead in drastically lowering marginal rates for the aristocratic class. Now we’re effectively screwed. If one country goes back to 40-50% on the highest earners, they will leave that country for another low-tax haven. We’re screwed, class-wealth continues to become massively imbalanced (it hasn’t been this our of whack since 1929), and there is effectively nothing we can do to stop it. Frankly, the western free-market is headed for a socioeconomic train wreck the likes of which we have never seen.

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