Happy Monday FR readers! As always, Monday’s post was written by Stephen Hall. Due to the multiple links and pictures for this post, I will be spending the rest of the day doing a hippie dance on Stephen’s lawn. (Don’t let him fool ya though, despite his protests, he loves it.)
Hope everyone has an awesome day!
Once again I have been regaled upon the internet by people who think they actually know things, when the fact is that they know almost nothing but are being easily manipulated by certain aspect if the leftist media circus.
When, in response to a comment citing an NYT poll that:
I pointed out that promoting “a stable family and taxes low enough to support family and motherhood” would be a better solution than more government programs, I had some rather odd responses.
It was not that those responses were typically leftist spin, that I expected, it was the complete lack of simple economic understanding together with an apparent widespread disinformation about taxes which caused me to look up a number of articles on the internet. (The majority of those responses were from one particular person who actually claimed to have an MBA but appears to have deleted the conversation, but a couple other responses remain.)
The response kept trying to inform me that:
Which for one thing I knew to be incorrect, but secondly, I found puzzling because I had never mentioned the 1950s but they kept bringing it up out of left field.
One gentlemen was so kind as to inform me that:
and was so kind as to provide me with the graphic at the top of this article to prove his point that taxes were indeed higher in the 1950s than they are now.
Because it is obvious looking at his chart that people in the 1950s were really paying (squinting really hard) ninety-one percent (91%) of their income in taxes yet could still afford to buy a house with a white picket fence, support a wife and two kids on a single income, and a new car. (Okay, I didn’t really squint, I just looked up the numbers.)
It seems to be a current fad on the left to advocate that tax rates were higher in the ‘50s, therefore we should raise taxes again so that we can achieve the prosperity America had then, as if the mere correlation and coincidence of taxation with prosperity becomes a magical formula of a spell of economic rather than understanding the causes and effects involved.
Several articles seem to advocate this, and seem to have a profound influence upon the less economically educated. Here are a couple samples:
http://www.businessinsider.com/history-of-tax-rates
https://bradfordtaxinstitute.com/Free_Resources/Federal-Income-Tax-Rates.aspx
The thing is, most people who want to argue politics to make a quick soundbyte don’t actually read the articles just the headlines, and that often vaguely. They see that the taxes were higher in the 1950s than today, especially where it is accompanied by a convenient graph, and ignore the title of that very graph.
It says, plain as day, “top marginal tax rates”, not the actual taxes people pay. The marginal rate is only the incremental rate, that is to say the rate charged for the last dollar earned, not the average tax rate.
Currently the median household income is about $61,227, which means that the marginal federal income tax rate for that median American household is 25%.
The average household income in 1950 was $4,237, which would place the average household in 1950 in a marginal tax bracket of 20%, and they would have to make over three times the average to get into a tax bracket higher than the current 25%.
In 1950, a person would have had to earn over $400,000, or $4,175,734 in today’s dollars in order to qualify for that top tax bracket.
There have been several articles debunking this notion that taxes were higher in the 1950s than they are currently. Here are a couple samples:
https://mises.org/library/good-ol-days-when-tax-rates-were-90-percent
https://www.wsj.com/articles/SB10001424127887324705104578151601554982808
So, the question becomes why publish such an obviously misleading graph concerning only the maximum tax rates instead of the actual amounts of taxes paid by each sector or the average or median taxes paid which paint a more realistic tax level for the average person?
Why deceive people into thinking that they are paying less taxes than their parents when they are actually paying more? Is it just so that they will demand more government services and entitlements, or is it to keep them diverted so they don’t realize just how much of the burden they are actually carrying?
