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The depression preceded World War II, the roaring twenties preceded the depression, and World War I preceded the roaring twenties. Humanity had had only 10 years between catastrophe. It was reasonable to have a large family, and there was a strong biological incentive to do so. Nobody knew how long prosperity would last. It had only lasted 10 years the previous time. And all of a sudden, humanity had atomic bombs with incredible capacity for destruction. Nobody knew when World War III would come, but with atomic bombs, it was guaranteed to be even more destructive than World War II. Luckily, peace lasted.
There was also a large economic boom, shared equally by rich and poor. Meaning there was a lot of stable, well-paid, long-term employment around. This included those with high and low job skills. You know, the kind that was all scrapped since around 1980. Before 1980 if the top 1% incomes went up by 10% so did they for the other 99%. Try that today, it's more like 100% for the top 1% vs. 0% for the rest of us. Point being everyone was included.
There was also a large economic boom, shared equally by rich and poor. Meaning there was a lot of stable, well-paid, long-term employment around. This included those with high and low job skills. You know, the kind that was all scrapped since around 1980. Before 1980 if the top 1% incomes went up by 10% so did they for the other 99%. Try that today, it's more like 100% for the top 1% vs. 0% for the rest of us. Point being everyone was included.
The top marginal tax rate in 1944 was 94%. In 1946 it was lowered all the way down to 91%, where - except for a brief bump up to 92% in the early 50s - it stayed until 1964, when it became 77%.
The top bracket in 1944 was $200,000+, or the equivalent to about $2.74 million and above in 2016. By 1964, that top bracket meant about $1.55 million and up in current dollars.
Those rates kept the wealth of the nation from becoming increasingly sequestered among a smaller and smaller number of individuals, thereby building a strong and vibrant middle class. There's a whole lot of dogma that preaches that this doesn't happen, but in the real world that dogma doesn't work. It's just a lot of rhetoric.
At one point FDR suggested a 100% for every thing over $100,000 a year. "Because, seriously, none of us are ever going to make that much money in a year."
At one point FDR suggested a 100% for every thing over $100,000 a year. "Because, seriously, none of us are ever going to make that much money in a year."
The 80-90% marginal tax rates and 60% corporate tax rates worked well enough to enable the great and equitable economic and baby boom. Guess why we don't have the neither now?
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