Taxes
A Brief History Of The Last 50 Years
There are many ways to look at many issues. Typically we hear how complicated the world is and how complicated the issues are. Taxes however are pretty simple. The right argues that it is our excessive taxation that is the source of America’s problems. Americans are overburdened. We can’t create jobs. We can’t live our lives. We can’t solve the critical problems ahead of us because of taxes.
Ironically, the voices on the right are correct. Many of our problems are the result of taxes. The problem is that taxes are too low.
Now I know it was hard for many of you to read that last sentence, particularly after decades of virtual brain washing by the right, but give me a moment to present you with some simple facts. To be clear, the right argues that taxes are too high. So let’s look at our current tax rates compared against historical rates:

Historical Tax Rates | Bottom | Top |
Current Rate: | 10% | 35% |
2000 | 15% | 39.6% |
1990 | 15% | 28% |
1980 | 14% | 70% |
1970 | 14% | 71.75% |
1960 | 20% | 91% |
It’s clear when you look at the numbers that taxes have been falling for the last 50 years. In fact, this is true not just for people but also for corporations. In 1950 corporate taxes accounted for approximately 30% of government revenue, and in 2010 that number has fallen to just 6.6%.
Let me say that again. Taxes have been steadily decreasing for the last 50 years. If taxes have been falling for the last 50 years then how can the argument that we are overtaxed hold any measure of truth?

Recently when the Bush tax cuts were set to expire, we heard the voices on the right clamoring that the tax cuts for the wealthiest Americans were essential. The wealthy are overburdened, overtaxed and without these tax cuts there is no way we could create new jobs. Yet again we bump up against another right wing falsehood. As we see above, not only have taxes been steadily decreasing for 50 years but those who benefited most were the wealthiest Americans.
Over that time the wealthiest Americans enjoyed not only 62% lower tax rates, but they also enjoyed 69% of the gains in income. By comparison, over that time the bottom 90% received only a 31% increase in income. When you look at the impact on the middle class from 1970 to 2008 the 31% increase experienced in the 1960s evaporated and they actually experienced a decrease in income, with all income growth over that period distributed among the top 10% of wage earners.
A similar story can be told about corporate taxes. According to David Cay Johnson, since 2000, corporate taxes are down almost 33%. Over that same time span, corporate profits are up 60%. Johnson notes that currently, corporations are sitting on almost $2 trillion in cash.
The familiar pattern of the facts being 180 degrees from what we hear from the right applies yet again with the issue of taxes. First the right argues that taxes are high and that the wealthy are overburdened. The facts are that since 1960 the wealthy have had their taxes reduced almost 62% They have received 90% of the income gains since 1960 and 100% since 1970.
Rather than encourage reinvestment through effective corporate tax policy and fair income tax policy, we have encouraged corporations and the wealthy to horde huge amounts of cash and wealth. Over that same span we have seen middle class incomes remain flat and as a result we have seen the American middle class begin to shrink. Upward mobility is on the decline and bankruptcy rates are on the rise.
But it’s not just the majority of Americans who are suffering, it is the nation itself. As tax rates have declined we have slowly and steadily moved toward larger and larger deficits. National deficits affect the states. State deficits affect the local governments. The ripple affect of the flow of wealth upward with no corresponding reinvestment or trickle down has created a great burden on our nation at all levels of government.
The voices on the right look at the problems of debt and exclaim “someone should do something about that”. They ignore the cause of the problem and instead use our financial woes as an excuse to do more of the same damaging policies which led us here. They seek to give more tax cuts to the wealthy while simultaneously cutting the programs that so many poor and middle class families need now more than ever.
The republicans are offering the wrong answer at the wrong time while conveniently ignoring the reality of American tax policy for the last 50 years.
It’s clear that taxes should be as low as they can be. It’s clear that the more money an individual can keep from their earnings the better. However it is also clear that the wealthy benefit the most from our government and the competitive advantages of America as a nation. The nation provides the infrastructure that enables corporations to produce their goods and services. The nation educates the workers and managers who keep those businesses running. The nation provides the defense that keeps the nation stable and safe so that business can be conducted. It is the nation that provides the stable, strong currency that makes American business so powerful.
In the face of all of these benefits the right argues that the wealthy deserve more. They argue that true patriots in their nation’s time of need should take more money, not give. They argue that true patriots keep their fellow American’s wages low while claiming the overwhelming majority of profit for themselves. They argue that true patriots fight to cut education, healthcare, and retirement benefits for the Americans who worked so hard for 50 years to make the wealthy even wealthier.
No one will argue that we shouldn’t have an upper class. No one will argue that wealthy Americans don’t provide benefit. But the moment the middle class dies, is the moment that the American dream dies, and with that so too America. No conservative can argue that wealth and cutting taxes outweighs the needs of the very nation itself. No conservative can argue that removing the possibility of upward mobility and the American dream is good for America.
In our time of national need we ALL need to give. The poor and the middle class have been giving for the last 50 years. It’s only fair that the wealthiest among us who have benefited so greatly should lend a hand to the nation that has given them so much.