Census: Half of Americans Are Poor or Low-Income

[Valmy]

Yes. Tea-partiests who pine for the good old days forget this.

No wonder no jobs were created in the 50s

[Admiral Yi]

No wonder no jobs were created in the 50s

Jobs were created in the 50s because American consumers had 15 years of pent up demand and international competition had been eliminated by superior firepower.

[Valmy]

Jobs were created in the 50s because American consumers had 15 years of pent up demand and international competition had been eliminated by superior firepower.

But what would be the motivation for filling that demand with those sorts of tax rates?  'Yeah I sold lots of goods.  Pity I made no money'?

Besides how was consumer demand being pent up in 1935?

[Admiral Yi]

But what would be the motivation for filling that demand with those sorts of tax rates?  'Yeah I sold lots of goods.  Pity I made no money'?

I expect a lot of that demand was being met by corporations.

Besides how was consumer demand being pent up in 1935?

Great Depression.  No money to spend.

[Valmy]

Great Depression.  No money to spend.

Right...so there would be no pent up demand because there was no cash.  Unless impoverished countries are just waiting to explode in orgies of consumerism.  And if you are tracing this back to the depression for the cause of 50s prosperity why does it start in 1935?

I expect a lot of that demand was being met by corporations.

Yes and they would find people to manage these corporations how?  Did executives and managers enjoy working for free in the 1950s?  They would not find loopholes for their taxes at all and just pony up 70% or 80% of it?

[Sheilbh]

But what  would be the motivation for filling that demand with those sorts of tax rates?  'Yeah I sold lots of goods.  Pity I made no money'?

Probably lingering 'all in this together' from the war.  Sense of community and common purpose helped - a couple of conservative writers argued that the right and left idealise the 50s.  The left for the economy, the right for the 'family values', they basically argued the two were linked - which is an interesting idea.  Maybe there was a stronger sense of civic responsibility? 

What's more weird is that top tax rate was cut after the war and then raised again in the 50s.

Having said all that I don't like confiscatory rates.

[Admiral Yi]

Right...so there would be no pent up demand because there was no cash.  Unless impoverished countries are just waiting to explode in orgies of consumerism.  And if you are tracing this back to the depression for the cause of 50s prosperity why does it start in 1935?

I don't follow.  Are you saying people didn't have any cash in the 1950s?

It doesn't start in 1935.  It starts in 1929.

Yes and they would find people to manage these corporations how?  Did executives and managers enjoy working for free in the 1950s?  They would not find loopholes for their taxes at all and just pony up 70% or 80% of it?

Beats me.

[Malthus]

But what  would be the motivation for filling that demand with those sorts of tax rates?  'Yeah I sold lots of goods.  Pity I made no money'?

Probably lingering 'all in this together' from the war.  Sense of community and common purpose helped - a couple of conservative writers argued that the right and left idealise the 50s.  The left for the economy, the right for the 'family values', they basically argued the two were linked - which is an interesting idea.  Maybe there was a stronger sense of civic responsibility? 

What's more weird is that top tax rate was cut after the war and then raised again in the 50s.

Having said all that I don't like confiscatory rates.

I wonder if having a high degree of wealth inequality tends to undermine social solidarity generally.

The pros of allowing a high degree of wealth inequality = allows more scope for innovation

The cons = tends to undermine social solidarity, can undermine meritocracy over time

Mind you, social solidarity is a not unmixed blessing itself - can appear as stifling conformity. 

[Valmy]

I don't follow.  Are you saying people didn't have any cash in the 1950s?

Yes but the pent up demand would come entirely from the war.  That is when people had money and couldn't buy stuff (well they did...but you know)

But I was saying I do not really think taxing the rich is the answer.  You seem pretty determined to show me that, in fact, it does work perfectly fine.  Which confuses me.  But sometimes I do not understand what you are getting at or what your point is when you start asking me questions.

[Admiral Yi]

Yes but the pent up demand would come entirely from the war.

But I was saying I do not really think taxing the rich is the answer.  You seem pretty determined to show me that, in fact, it does work perfectly fine.  Which confuses me.  But sometimes I never understand what you are getting at or what your point is when you start asking me questions.

WTF?

I'm not determined to show you anything.  I'm explaining how things worked back then to the best of my understanding.  I'm asking you questions when I don't know what you mean.

[Sheilbh]

I wonder if having a high degree of wealth inequality tends to undermine social solidarity generally.

The pros of allowing a high degree of wealth inequality = allows more scope for innovation

The cons = tends to undermine social solidarity, can undermine meritocracy over time

Mind you, social solidarity is a not unmixed blessing itself - can appear as stifling conformity.

That's very possible, I think.  It's another of those issues which each society will deal with in their own way.  Scandinavians will always be more egalitarian than Anglo-Saxons.

My view is that inequality's become more of a problem in the UK in recent years and has gone too far.  I think we're getting more of the negative effects than the positive.  We should work to reduce it.

[Ideologue]

Also, did that happen a lot in the period 1940-1980?  Because high marginal rates were a feature of American life for nearly half a century, yet our population of rich people grew along with our middle class and economy as a whole.  It was pretty sweet to hear people tell it.

JFK is the one who dropped the confiscatory war time top rates.

JFK and LBJ (or Congress under JFK and LBJ) moved it from ~90% to ~70%, but it dropped slower until Reagan, when it fell to ~50%.  Evidently, the GHW Bush administration is the first since the Depression to have the miniscule marginal tax rates of ~30%.  Then up again with Clinton, to ~40%.  Then down, down, down, although never to the nadir of GHW.

[Ideologue]

Great Depression.  No money to spend.

Right...so there would be no pent up demand because there was no cash.  Unless impoverished countries are just waiting to explode in orgies of consumerism.  And if you are tracing this back to the depression for the cause of 50s prosperity why does it start in 1935?

I expect a lot of that demand was being met by corporations.

Yes and they would find people to manage these corporations how?  Did executives and managers enjoy working for free in the 1950s?  They would not find loopholes for their taxes at all and just pony up 70% or 80% of it?

That's not what marginal rate means, Val.  At absolute worst, it represents a salary cap.

[Admiral Yi]

JFK and LBJ (or Congress under JFK and LBJ) moved it from ~90% to ~70%, but it dropped slower until Reagan, when it fell to ~50%.  Evidently, the GHW Bush administration is the first since the Depression to have the miniscule marginal tax rates of ~30%.  Then up again with Clinton, to ~40%.  Then down, down, down, although never to the nadir of GHW.

You sure?  I thought JFK dropped it a buttload.

[Eddie Teach]

I thought GHWB raised taxes?