Dave JohnsonJan 20, 2023

I'm older so I remember things. Everything you see happening today should be understood this way:

The top tax rate used to be 90% in order to prevent the really rich from destroying democracy.

The corporate tax rate was 50% because corporations exist to serve society.

AND the inheritance tax was really high to keep family dynasties from gaining power over us.

#taxes #democracy

Show threadPat
@dcjohnson #taxes I know from my business experience that high income people did not pay those high tax rates. Even the moderately rich and corporations acquired tax shelters (e.g., real estate ltd partnerships)--the sale of which was a bustling industry. To think people and corps paid those high rates is misleading. Nobody with a good accountant paid high taxes.
Jan 20, 2023 at 10:47pmWeb
Show threadLet's go to the 3DBB.Jan 21, 2023
@patrascan @dcjohnson But aren't today's rates also, in practice, reduced by various offsets including losses from prior years? If the rich never paid a full 91%, it's just as true that today they don't pay the full 37%. The comparison remains apt.
Show threadPatJan 21, 2023
@Dbregernyc You make a good point! I think some folks believe that once upon a time the rich were forking over 91% of their income in taxes and as a result we were somehow better off as a nation because our tax code demanded higher payments from those who could afford it. Therein lies the misunderstanding, I think.
Show threadLet's go to the 3DBB.Jan 21, 2023
@patrascan. Let's say you're able to shelter one half of your tax liability then and now so that pre-JFK the top bracket effectively paid 45% of their income in taxes and today they pay 19%. 1959 looks a lot better for the public weal to me. And understand the top bracket kicked in at the equivalent of $4m but now at $700k which means a lot of people who aren't very rich pay the same rate as the 0.1%.
Show threadPatJan 21, 2023
@Dbregernyc Leona Helmsley put it very succinctly when she said "Only the little people pay taxes". And thus has it ever been!
Show threadLet's go to the 3DBB.Jan 21, 2023
@patrascan Real estate depreciation - values actually increase while the owner deducts the "loss" of value resulting from wear and tear. It's magic!
Show threadPatJan 21, 2023
@Dbregernyc Seriously! And in tax shelters of early 1970s for real estate limited partnerships, each and every general partner in a commercial project (no matter how many GPs there were!) was permitted to write off the entire depreciation for the whole project. Talk about magic!
Show threadPatJan 21, 2023
@Dbregernyc oops I meant limited partners when I said general partners. Usually there was one GP and then any number of LPs. Sorry for confusion
Show threadLet's go to the 3DBB.Jan 21, 2023
@patrascan And the $700k earner is much less likely to be able to shelter income.
Show threadDave JohnsonJan 28, 2023
@patrascan they did. The nonsense that they didn't just justifies lower tax rates.
Show threadPatJan 28, 2023
@dcjohnson Leona "only little people pay taxes" Helmsley disagrees with you. And she would know!