For most people living today [the median age for males is 35.8
years and for females 38.5 years] they have lived in an age of taxes and
incentives that have redistributed the wealth of the country towards the top.
We should know the figures by now. That is their experience and they are used
to it. Even though now it means that most families now need two income earners
and the median family income have been static during their lives.
But such was not always the case rather it is an exception. One
hundred years ago the 16th amendment to the constitution was passed
giving the government the power to tax income how it deemed fit. And in
eighteen months they passed an income tax. The tax they passed was to come from
those who could most afford it, the wealthy. As a result any family earning
less than $4,000 did not pay any tax – in today’s dollars that equals an
incomes of $70,000 a year; or 98% of our citizens paid no tax.
The wealthy paid a whopping 1 to 7 percent in taxes. So, folk argue
our tradition was to have low taxes only upon the very wealthy. It was a short
tradition. Five years later the top tax rate went to 77%.
Now bear in mind WWI started in 1914 thus a lot of money was
quickly needed, so taxes were raised on the wealthy and some taxes were placed on
consumption; so you had both progressive and regressive taxes though the sales
taxes were low. But we need to remember that war bonds primarily funded these
wars, we loaned money to ourselves unlike how we have funded wars since then. Though
income taxes were increased to a wider base which most folk agreed was fair.
During most of our history people have supported progressive tax
rates even though the tax base has widened. Folk see that as fair and still do.
As to explaining the last 3 decades plus when those principles seem
to have disappeared. Hmmmm. But for those in the median age range that is their personal history.
One thing does seem clear, wars are expensive and we used to
support them with our dollars; now we borrow to fund these wars and that drives
up debt far more than programs the benefit the citizenry. In fact, those
programs benefit the economy as the New Deal proved.
Knowing history is a good thing.
"now we borrow to fund these wars..."
ReplyDeleteNothing was borrowed when it comes to this. Defense of the nation is one of the few necessary Constitutional federal expenditures; and the cost of defense is but a fraction of the actual total Federal revenue coming in yearly.
'but a fraction of the actual total Federal revenue coming in yearly.' You'd think, considering our well-regulated militia.
ReplyDeleteWith as few as hundreds of gun laws laws and as many as 20,000 (click here and here), the "well-regulated part" is much more than taken care of. Even using the low estimate from the CBS article which mentions states having from 1 to 13 gun laws.
ReplyDelete'the "well-regulated part" is much more than taken care of.'
ReplyDeleteHow so?
Hundreds or thousands of gun laws, according to that CBS article. And that is just at the state level. It does not cover federal laws or city ordinances. You'd think that something chained in by hundreds and hundreds and hundreds of laws might very well be regulated up the wazoo.
ReplyDelete'You'd think that something chained in by hundreds and hundreds and hundreds of laws might very well be regulated up the wazoo.' Indeed; or be at least minimally effective.
ReplyDeleteYou claim nothing was borrowed when is comes to this dmarks. But were war bonds issued? And the money spent is considered by most folk to have created enormous debt for us. Estimates back in 2008 were at 40%. Just because congress approved the funds does not mean they were not borrowed. http://theweek.com/article/index/40617/briefing-the-iraq-money-pit
ReplyDeleteThe Iraq war, says economist Joseph Stiglitz, is “the first U.S. war financed entirely on credit.” When the war started, the Bush administration said it would cost no more than $60 billion. But the U.S. budget was already in deficit, so the administration had to borrow money to finance the invasion. About 40 percent of the money was borrowed from China and other international investors—the first time since the Revolutionary War that foreigners financed a U.S. war. At the same time, the administration and Congress lowered taxes instead of raising them, as is customary in wartime.
ReplyDeleteAgain, national defense is a Constitutional priority. And the money coming in was more than enough to cover this, and much muhc more. If one is to make a decision as to which parts of the budget were financed with debt and which were not, I would lean away Constitutionally-mandated functions of government and toward the extras (the many many billions of pure waste).
ReplyDelete" At the same time, the administration and Congress lowered taxes instead of raising them..."
I am glad the Administration didn't choose to go to war against the American economy and taxpayers.
Also, lets consider the statement "And the money spent is considered by most folk to have created enormous debt for us"
ReplyDeleteThe "cost of war" is less than $1.5 trillion dollars. The amount of debt accrued under the "war years" of Bush and Obama is about $10 trillion. If one makes the arbitrary decision and shoves the cost of fighting back against the terrorists entirely into the debt column, that leaves it still at a total of just 15% of of the entire debt. Again, assuming that the war was all debt, even if we eliminated it and let the terrorists attack us with complete impunity, we would have still had a massive debt. Probably a lot more so (as the repeated 9/11s which would have resulted from such a policy would have had a huge negative effect on revenues and the economy, as the actual 9/11 incident did).
The cost of Homeland Security has been over $1 trillion. Debatible whether frisking grannies and toddlers falls under
ReplyDeletedefense, though.