Taxation has become a hot-button issue, but it is one that working-class folks need to get involved in.
As complex as tax issues are, perhaps we can use a bit of statistical shorthand to get a general overview of where we have been and where we might be headed.
In 1960 the federal tax rate on the top bracket for the highest incomes was 91 percent, according to an article in the Journal of Economic Perspectives* By 1988 the rate had fallen to 39.6 percent. In 1993 the highest incomes were taxed at a rate of 39.6 percent. The rate was lowered again in 2003 to 35 percent.
Corporate income tax also has been slashed in the last 50 years from around 3.5 percent to 4.0 percent of GDP in the 1960s to less than 2 percent of GDP in the early part of the 21st century.
It is apparent that the tax burden on wealthy individuals and corporations has declined dramatically in the last 40-plus years. From Reagan’s implementation of Milton Friedman’s economic slash-and-burn “trickle down” theories, through Clinton’s end of “welfare as we know it” and the implementation of NAFTA, to George W. Bush’s tax cuts for the wealthiest Americans, we have seen the executive branch of the U.S. government preside over a systematic dismantling of the gains won by working people in the early 20th century.
The debate around tax policy is the right place for working class people to take a stand. The capitalist class, through their bought-and-paid-for political surrogates, has been looting the wealth produced by working people for decades. It’s time to take it all back.
* All statistics are from the Journal of Economic Perspectives, Vol 21 Number 1 winter 2007, “How Progressive is the US Federal Tax System? A Historical and International Perspective,” Piketty and Saez.
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