Census: Half of Americans Are Poor or Low-Income

[MadImmortalMan]

Were rich people really paying rates that high in the 50s?

Yes.  70? 80?

I wouldn't go so far as to put rates like that on anybody. Even the hyper-rich. It would hurt my conscience. I'd stop around 50 or so probably.

[Ideologue]

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.

Well, he did (or LBJ did, JFK getting capped in 1963, but I imagine he had some say in what happened in 1964 viz. tax policy).  91 to 77.  Granted, I just looked at a chart.  I guess it could be wrong, but here goes:



It's from the Tax Policy Center, "a joint venture of the Urban Institute and Brookings Institution. The Center is made up of nationally recognized experts in tax, budget, and social policy who have served at the highest levels of government."

[Sheilbh]

You sure?  I thought JFK dropped it a buttload.

I think he cut tax rates lower down as well which would have had a cumulative effect and have had most impact on the middle class - which makes sense as a politician.

[Richard Hakluyt]

Were rich people really paying rates that high in the 50s?

Yes.  70? 80?

I wouldn't go so far as to put rates like that on anybody. Even the hyper-rich. It would hurt my conscience. I'd stop around 50 or so probably.

The 40% rate we had in the UK seems to have maximised the total tax take..........more than that and people avoid/evade it.

[Ideologue]

Were rich people really paying rates that high in the 50s?

Yes.  70? 80?

I wouldn't go so far as to put rates like that on anybody. Even the hyper-rich. It would hurt my conscience. I'd stop around 50 or so probably.

Like, if they made $110k and actually paid 70% of their total income, I'd be concerned.  But let's take a made up tax schedule like so

0-25,000: no liability
25,000-50,000: 20%
50-75,000: 30%
75,000-100,000: 50%
100,000+: 70%

and Hypothetical Man 1 making $110,000 a year.

He'll pay 5k + 7.5k + 12.5k + 7k, for total liability of 32k.

He's only paying 32% of his income.  Leaving him with 78k to spend on comic books, hookers and blow.  The horror?

Now, yeah, with Hypothetical Man 2 making $500k, the percentage of income taken is far different.  He'll pay 5k + 7.5k + 12.5k + 280k, or 305k in total.  That's 61% of his total income.

But he still has 195k to spend on yachts and personal security forces.

And my belief is at those rarefied heights, it's more of a matter of social signaling or prestige of the position or creating a little empire than actually buying shit.

[Valmy]

The 40% rate we had in the UK seems to have maximised the total tax take..........more than that and people avoid/evade it.

Yeah that was what I was trying to get at...even through my ignorance of how marginal rates work.

[Valmy]

But he still has 195k to spend on yachts and personal security forces.

And my belief is at those rarefied heights, it's more of a matter of social signaling or prestige of the position or creating a little empire than actually buying shit.

What about the NFL star with 9 kids with 9 different mothers?  He needs that money for child support!

[Ideologue]

But he still has 195k to spend on yachts and personal security forces.

And my belief is at those rarefied heights, it's more of a matter of social signaling or prestige of the position or creating a little empire than actually buying shit.

What about NFL star with 9 kids with 9 different mothers?  He needs that money for child support!

Of course our numbers here are presented without any deductions for dependents, charitable contributions, student loan payments, party membership, etc.

[merithyn]

And 45k is not that bad for a single income--like Ide said if a family of 4 makes that it's two incomes of 20 grand plus two kids presumably. Which is pretty poor, but not as poor as my family when I was a kid. Not by a long shot. If they live in Manhattan it's a different thing. 45k for a Somali family of four probably means dad is a warlord. You have to have perspective.

I live in a smallish city in Middle America and that's a pretty tight budget. Like Ide says, that's a razor's edge. One medical emergency, one week without pay, and the family is in dire straights. Trust me... I've been there. 

[MadImmortalMan]

And 45k is not that bad for a single income--like Ide said if a family of 4 makes that it's two incomes of 20 grand plus two kids presumably. Which is pretty poor, but not as poor as my family when I was a kid. Not by a long shot. If they live in Manhattan it's a different thing. 45k for a Somali family of four probably means dad is a warlord. You have to have perspective.

I live in a smallish city in Middle America and that's a pretty tight budget. Like Ide says, that's a razor's edge. One medical emergency, one week without pay, and the family is in dire straights. Trust me... I've been there. 

Waking up in the morning to get ready for school and not having the electricity on or hot water for a shower were regular occurrences for me as a kid. I hear ya. Hell, I didn't have a phone my senior year in high school. That fucks up the social life.

My dad had five heart attacks in the 90s, and three of those without insurance.

All that said, 45k would have seemed like a million dollars.

[MadImmortalMan]

and Hypothetical Man 1 making $110,000 a year.

He'll pay 5k + 7.5k + 12.5k + 7k, for total liability of 32k.

He's only paying 32% of his income.  Leaving him with 78k to spend on comic books, hookers and blow.  The horror?

Now, yeah, with Hypothetical Man 2 making $500k, the percentage of income taken is far different.  He'll pay 5k + 7.5k + 12.5k + 280k, or 305k in total.  That's 61% of his total income.

But he still has 195k to spend on yachts and personal security forces.

And my belief is at those rarefied heights, it's more of a matter of social signaling or prestige of the position or creating a little empire than actually buying shit.

The first, no biggie. The second, too much. Nobody taking home 195 is buying yachts. You have to go way higher than that I think.

[Ideologue]

I fully concede I do not know how much a yacht costs.

[fhdz]

I fully concede I do not know how much a yacht costs.

Not to mention any personal security force that can be had for such a low post-yacht price is likely to be one meth-head with a sharp stick.

[Malthus]

But he still has 195k to spend on yachts and personal security forces.

*Sniff* I needed a laugh. 

[Ideologue]

I fully concede I do not know how much a yacht costs.

Not to mention any personal security force that can be had for such a low post-yacht price is likely to be one meth-head with a sharp stick.

I keep my men addicted to the White.

Anyway, I actually looked.  You could totally buy a yacht (low-end, about $400k, but a yacht) with $195k take-home.

You might have to make some decisions about what else you buy but OH NO WE CAN'T HAVE THAT.