We have seen where the "Pledge to America" is a façade that has nothing, or next to nothing, as foundation. Of the 46 pages of "Pledge," only 17 have a message and even that is
Large Type
and w i d e l y s p a c e d.
Even though this year government employment has declined and private sector jobs increased by over 750,000, the "Pledge" states that the "Only parts of the economy expanding are government and the National Debt." That, of course, is FALSE!
Even though jobless claims are down 8%, the "Pledge" says, "Jobless claims continue to soar." That is obviously FALSE!
Even though it has been proven FALSE, it echoes the claims that the IRS may need to expand by over 16,000 employees.
Even though the CBO, a non-partisan group of experts, states that the stimulus bill will cost $814 billion over 10 years, about $81 billion a year, the "Pledge" claims it will cost $1 Trillion.
Even though tax cuts would not hurt any REAL "Small Business," the "Pledge" claims that half of the small businesses in America would have higher taxes. What they don't tell you is that the GOP has included as "Small Business" are businesses that make over $450 million a year. That's not a small business!
The "Pledge" is full of "Apple Pie" and "Motherhood" terms and Phrases like ". . . to those who yearn to be free" and "America is an idea."
Even though the will of the people is what put Obama in office and gave the Legislature to the Democrats, the "Pledge" states, ". . . an unchecked executive, a compliant legislature and an overreaching judiciary have combined to thwart the will of 'the people.'" That, of course, is FALSE!
Even though the CBO estimates that "Defensive Medicine" or ordering extra tests as a defensive measure, would only raise the cost of medicine about ½ of 1%, the "Pledge" states "Skyrocketing medical liability insurance rates have distorted the practice of medicine, routinely forcing doctors to order costly and often unnecessary tests to protect themselves from lawsuits, often referred to as 'defensive medicine.'" So, that part of teh "pledge" is FALSE!
The "Pledge" is like Cotton Candy and Marshmallow Fluff. . . it kinda tastes good for a while but in the end you are gonna get lots of cavities and may even get diabetes. It sounds good but in the end it will only hurt you and cost you more.
Most of the really bad things that the GOP "Pledge" predicts will happen only if the Republicans get control of the legislature in the midterms and/or the Republicans continue to say NO to everything that would be good for the middle class.
The solution to all this is for you to get educated and to educate those around you. Then get out and vote in an intelligent manner. Offer your services on Election Day, to help other Liberals get to the polls.
Get informed and stay informed.
References:
www.data.bls.gov/cgi-bin/surveymost?ce
www.data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool-latest_numbers&series_id-LNS14000000
www.factcheck.org/2009/10/malpractice-savings-reconsidered/
www.factcheck.org/2010/03/irs-expansion/
www.cbo.gov/ftpdocs/117xx/doc11706/08-24-ARRA/pdf
www.factcheck.org/2009/06/making-sense-of-stimulus-spending
www.jct.gov/publications.html?func-startdown&id-3691
www.factcheck.org/2010/09/2011-tax-increases/
Thursday, September 30, 2010
Sunday, September 26, 2010
Don't Take The Pledge!
One thing must be understood from the start, jobs are created by DEMAND not by rich guys with lots of money to invest. Rich guys with lots of money to invest put that money where there is a DEMAND for a product or service and where that demand has not already been met and surpassed. Rich guys with lots of money to invest have never created a job and never will. Bill Gates wasn't rich when he started Microsoft, he just found something where there was demand and satisfied that demand, and that created more demand . . . and so it goes.
The way to create demand is to put money in the hands of the masses, the great middle class. If they have money they will find a way to spend it and a product on which to spend it. That in turn creates more jobs to make those products and perform those services.
The way to put more money in the hands of the masses is with a middle class tax cut, or in this case a tax cut continuation.
The way to create demand is to put money in the hands of the masses, the great middle class. If they have money they will find a way to spend it and a product on which to spend it. That in turn creates more jobs to make those products and perform those services.
The way to put more money in the hands of the masses is with a middle class tax cut, or in this case a tax cut continuation.
Now to that "Pledge to America"
The Republican "Pledge" tells you exactly what the Republicans will do when they take over Congress . . . SORTA!
This is a 46 page document with large glossy photos that really comes out to be about 17 pages of real text(large type, widely spaced) and I use the word "Real" very loosely. About the only things I found that were definite were that they would repeal "The Patient Protection and Affordable Care Act," (Obama Care). I just wonder what about "Patient Protection" and "Affordable Care" do the Republicans not like? Oh, that's right, they think that Health Care is a Commodity that should be only for the rich. They also want to put a halt to all unspent TARP funds. You know, the stuff that stopped the decline of the Auto Industry and has created enough new jobs and preserved old ones to stop the skid we were in. By the way, the original TARP was a Bush era and Republican backed plan that they do not now like. But they liked it when it was Bush's plan.
I've gone through this document, as you can at the link above, and here is what I've found. There are 13 full pages of glossy pictures, that's a full 28% of the document. There are 8 title pages with only the title on them, that 17% of the document. There are 2½ pages of graphs, that over 5% of the document. One page is the back cover, one page is the table of contents, 5 pages are either single column or only half covered with words. So, the entire 46 page document has, in very large type and widely spaced, 17 pages of substance(I use that word loosely), or around 37% . . . a little over a third of the "pamphlet" . . . but it is attractive. If I were a judge, I'd give the document an 8 for style and a 2 for substance.
Go take a look at it for yourself. I guarantee, it won't take long for you to read and it has such broadly worded ideas and ideals that you can almost speed read it. Actually, many of the thoughts are very close to those of the White House, just using different words.
My next post will be on the inside of the "Pamphlet." Go to:
http://swoopsfromsnowyowl.blogspot.com/2010/09/dont-take-pledge-conclusion.html
http://swoopsfromsnowyowl.blogspot.com/2010/09/dont-take-pledge-conclusion.html
Friday, September 24, 2010
The "I" of Newt!
Newton Leroy McPhearson, born June 17, 1943 in Harrisburg, Pennsylvania into a family with a nineteen year old father and a sixteen year old mother. The McPhearson Family didn't last very long and his mother married again to Robert Gingrich who adopted Newt. The Gingrich family was military and moved frequently. Newt graduated from High School in Georgia and went to college at Emory University in Atlanta where he graduated with a BA, then later he received an MA, then went to Tulane for a PhD in modern European history.
Newt Gingrich was first elected to the House of Representatives in 1978 after two previous unsuccessful attempts. He was then reelected six times to that position until he decided to not take his final reelection and left the House and his office as Speaker, under pressure from his own party.
To retrace, in 1995, Newt and a small group of powerful Republicans decided to bring the government to its knees by stopping all funding of vital programs. He said he wanted to "Slow the growth of Government Spending." That was a great Republican thought and garnered him great praise among fellow Republicans. Later however, it was revealed by Newt himself, that it was to spite President Clinton for snubbing him on Air Force One and making him stay in the back of the plane with Bob Dole. Tom Delay wrote in his book, "No Retreat, No Surrender;"
"He told a room full of reporters that he forced the shutdown because Clinton had rudely made him and Bob Dole sit at the back of Air Force One . . . Newt had been careless to say such a thing and now the whole moral tone of the shutdown had been lost. What had been a noble battle for fiscal sanity began to look like the tirade of a spoiled child . . . The Revolution was never the same." But Hillary Clinton, in her book "Living History" shows a picture of that flight with Bill Clinton, Bob Dole and Newt Gingrich laughing on that flight together and having a good time.
In 1997, the House voted overwhelmingly to reprimand Gingrich for ethics violations going back as far as late 1994. Gingrich had to pay a $300,000 penalty. That was the first time in history that a Speaker was disciplined for an ethics violation. Also in 1997, a few Republicans saw that Gingirich was becoming a liability and tried to replace him as Speaker. Tom Delay, Dick Armey, John Boehner and Bill Paxon along with lesser House Members Steve Largent, Lindsey Graham and Mark Souder plotted against Gingrich and held secret meetings to capture the leadership of the party. They were going to hand Gingrich an ultimatum, that Gingrich resign or they would vote him out. But Dick Armey got cold feet and warned Gingrich about he coup.
In 1998, Newt became a heavy liability with his approval rating below 50% among Republicans and the Republicans had lost seats in the worst showing in 64 years for the party that didn't hold the Presidency. Gingrich faced yet another rebellion and held most of the blame for the losses. After being reelected in November 1998 Newt Gingrich quit as Speaker and left the House. His reasoning was, "I'm willing to lead but I'm not willing to preside over people who are cannibals."
Gingrich has been married three times . . . so far. Gingrich was married when he started dating his second wife. He told his first wife and they planned the divorce while his first wife was recovering from cancer in the hospital. He married his second wife six months later. Gingrich began an affair with house staffer Callist Bisek, 23 years younger than he, in the mid 90s. That continued during the Congressional investigation of Bill Clinton and the Monica Lewinsky scandal. He married her in 2000 shortly after his divorce from his second wife.
Some of his present quotes:
"When the United States 'first created the federal income tax, frankly, nobody below a million dollars a year paid anything.'" That of course is totally FALSE. (See my previous posts on the history of the income tax.) The first income tax was in 1913, those brackets were:
$0-$20,000 paid 1%
$20,000-$50,000 paid 2%
$50,000-$75,000 paid 3%
$75,000-$100,000 paid 4%
$100,000-$250,000 paid 5%
$250,000-$500,000 paid 6%
Over $500,000 paid 7%
(From http://www.taxfoundation.org/)
In January of this year on the O'Reilly Factor Newt said:
"The President recently signed, very quietly, an executive order that basically releases Interpol from all American Constraints. Freedom of Information Acts don't apply. All the constraints that you as a citizen could use against an American police force, based on a recent Obama-signed executive order, give Interpol, which has relationships with Syria, with Libya, with Iran, it give them all sorts of extralegality in the United States in a way that has never ever before been offered to Interpol. And I'm very curious as to why the President is doing this . . . What I'm told is that it could lead to a number of investigations by Interpol in the United States, potentially aimed at American officials. And the question I would raise is, why would the President of the United States give that kind of extralegal protection to an international police force?" This was rated by http://www.politifact.com/ as "Liar, Liar, Pants on Fire." The key problem with this notion is that Interpol couldn't investigate CIA or American officials because Interpol doesn't do investigations. It doesn't arrest anyone, and doesn't even have it own officers. It helps police organizations in different countries communicate and coordinate actions, provides databases of crime information (fingerprints, stolen artwork, names of suspected terrorists), training and does other support services.
In late May of last year, Newt said: Inside the stimulus package "is anti-Christian legislation that will stop churches from using public schools for meeting on Sundays, as well as Boy Scouts and student Bible study groups." Again, politifact rated this one as a "Pants on fire" lie. And what is really bad about this one is that a fund raising mail out that contained it also stated, "Bring moral leadership back to our nation." I guess morality includes telling lies as far as Newt is concerned. When this one is passed to you, ask, "Could you cite the location of that for me?" It ain't there and never was.
In May of 2009, Newt said, "Democrats in Congress had control since January of 2007. They haven't passed a law making waterboarding illegal. They haven't gone into any of these things and changed law." That, of course, is FALSE. In 2008, Democrats did pass legislation that would have had the effect of outlawing waterboarding by restricting U. S. agents to interrogation methods outlined in the Army Field Manual. The Manual specifically forbids waterboarding. But President George W. Bush VETOED the bill and Democrats were not able to muster the two-thirds majority necessary to override the veto.
If you get notes and emails promoting Newt Gingrich, copy and paste this to the one that sent it to you. He is not a plus for the Republican Party or for Conservatism in general . . . after you look a bit deeper.
Newt Gingrich holds truth as high as he holds his marriage vows. He'll do what it takes to promote Newt . . . the Big "I," and he'll squash whatever is in his way. Don't get taken in!
Newt Gingrich was first elected to the House of Representatives in 1978 after two previous unsuccessful attempts. He was then reelected six times to that position until he decided to not take his final reelection and left the House and his office as Speaker, under pressure from his own party.
To retrace, in 1995, Newt and a small group of powerful Republicans decided to bring the government to its knees by stopping all funding of vital programs. He said he wanted to "Slow the growth of Government Spending." That was a great Republican thought and garnered him great praise among fellow Republicans. Later however, it was revealed by Newt himself, that it was to spite President Clinton for snubbing him on Air Force One and making him stay in the back of the plane with Bob Dole. Tom Delay wrote in his book, "No Retreat, No Surrender;"
"He told a room full of reporters that he forced the shutdown because Clinton had rudely made him and Bob Dole sit at the back of Air Force One . . . Newt had been careless to say such a thing and now the whole moral tone of the shutdown had been lost. What had been a noble battle for fiscal sanity began to look like the tirade of a spoiled child . . . The Revolution was never the same." But Hillary Clinton, in her book "Living History" shows a picture of that flight with Bill Clinton, Bob Dole and Newt Gingrich laughing on that flight together and having a good time.
In 1997, the House voted overwhelmingly to reprimand Gingrich for ethics violations going back as far as late 1994. Gingrich had to pay a $300,000 penalty. That was the first time in history that a Speaker was disciplined for an ethics violation. Also in 1997, a few Republicans saw that Gingirich was becoming a liability and tried to replace him as Speaker. Tom Delay, Dick Armey, John Boehner and Bill Paxon along with lesser House Members Steve Largent, Lindsey Graham and Mark Souder plotted against Gingrich and held secret meetings to capture the leadership of the party. They were going to hand Gingrich an ultimatum, that Gingrich resign or they would vote him out. But Dick Armey got cold feet and warned Gingrich about he coup.
In 1998, Newt became a heavy liability with his approval rating below 50% among Republicans and the Republicans had lost seats in the worst showing in 64 years for the party that didn't hold the Presidency. Gingrich faced yet another rebellion and held most of the blame for the losses. After being reelected in November 1998 Newt Gingrich quit as Speaker and left the House. His reasoning was, "I'm willing to lead but I'm not willing to preside over people who are cannibals."
Gingrich has been married three times . . . so far. Gingrich was married when he started dating his second wife. He told his first wife and they planned the divorce while his first wife was recovering from cancer in the hospital. He married his second wife six months later. Gingrich began an affair with house staffer Callist Bisek, 23 years younger than he, in the mid 90s. That continued during the Congressional investigation of Bill Clinton and the Monica Lewinsky scandal. He married her in 2000 shortly after his divorce from his second wife.
Some of his present quotes:
"When the United States 'first created the federal income tax, frankly, nobody below a million dollars a year paid anything.'" That of course is totally FALSE. (See my previous posts on the history of the income tax.) The first income tax was in 1913, those brackets were:
$0-$20,000 paid 1%
$20,000-$50,000 paid 2%
$50,000-$75,000 paid 3%
$75,000-$100,000 paid 4%
$100,000-$250,000 paid 5%
$250,000-$500,000 paid 6%
Over $500,000 paid 7%
(From http://www.taxfoundation.org/)
In January of this year on the O'Reilly Factor Newt said:
"The President recently signed, very quietly, an executive order that basically releases Interpol from all American Constraints. Freedom of Information Acts don't apply. All the constraints that you as a citizen could use against an American police force, based on a recent Obama-signed executive order, give Interpol, which has relationships with Syria, with Libya, with Iran, it give them all sorts of extralegality in the United States in a way that has never ever before been offered to Interpol. And I'm very curious as to why the President is doing this . . . What I'm told is that it could lead to a number of investigations by Interpol in the United States, potentially aimed at American officials. And the question I would raise is, why would the President of the United States give that kind of extralegal protection to an international police force?" This was rated by http://www.politifact.com/ as "Liar, Liar, Pants on Fire." The key problem with this notion is that Interpol couldn't investigate CIA or American officials because Interpol doesn't do investigations. It doesn't arrest anyone, and doesn't even have it own officers. It helps police organizations in different countries communicate and coordinate actions, provides databases of crime information (fingerprints, stolen artwork, names of suspected terrorists), training and does other support services.
In late May of last year, Newt said: Inside the stimulus package "is anti-Christian legislation that will stop churches from using public schools for meeting on Sundays, as well as Boy Scouts and student Bible study groups." Again, politifact rated this one as a "Pants on fire" lie. And what is really bad about this one is that a fund raising mail out that contained it also stated, "Bring moral leadership back to our nation." I guess morality includes telling lies as far as Newt is concerned. When this one is passed to you, ask, "Could you cite the location of that for me?" It ain't there and never was.
In May of 2009, Newt said, "Democrats in Congress had control since January of 2007. They haven't passed a law making waterboarding illegal. They haven't gone into any of these things and changed law." That, of course, is FALSE. In 2008, Democrats did pass legislation that would have had the effect of outlawing waterboarding by restricting U. S. agents to interrogation methods outlined in the Army Field Manual. The Manual specifically forbids waterboarding. But President George W. Bush VETOED the bill and Democrats were not able to muster the two-thirds majority necessary to override the veto.
If you get notes and emails promoting Newt Gingrich, copy and paste this to the one that sent it to you. He is not a plus for the Republican Party or for Conservatism in general . . . after you look a bit deeper.
Newt Gingrich holds truth as high as he holds his marriage vows. He'll do what it takes to promote Newt . . . the Big "I," and he'll squash whatever is in his way. Don't get taken in!
Thursday, September 16, 2010
The History of the Federal Income Tax, Conclusion
As we have seen, since the beginning in 1913, the Federal Income Tax has been and rightfully so, a progressive tax. By 1918 they realized that the "Progression" should run higher . . . a lot higher. So, it went all the way from a top rate of 7% to a top rate of 77%, and the brackets went from 7 to 56.
The poorer pay a lower percentage and the wealthy pay a higher percentage. Why you ask? A person that pays 10% tax on an income of $15,000, pays 100% of their discretionary income on taxes and have nothing left for retirement or anything else, like a new refrigerator or furniture. That's not good for the refrigerator and furniture manufacturers. A person that pays 10% on $100,000 pays about 25% of their discretionary income on taxes and they have lots more means to acquire deductions to lower their taxable income. But, since the middle class doesn't have any money to spend on clothes and refrigerators and furniture, investments in those areas don't draw any income. In fact, our economy requires that middle income people to have spendable income to make everything work, otherwise the rich don't have anyone to sell their products. Without demand, there are no jobs in industry. Demand creates jobs.
Let's get back to where we were in our history of the Federal Income Tax.
As stated, the income tax brackets stayed pretty stable from 1965 through 1982. There was some small variance, but mostly it was the same. The top rate for 17 years was 70%.
That all changed when Ronald Reagan became President. He cut the top rate by almost 30% from a 70% rate down to a 50% rate and he cut the highest income bracket that started at $215,000, down to $85,000. This was massive for the guy that had a taxable income of $225,000. That guy or gal paid $45,000 less in taxes in one year than in the previous. It was a gift to the wealthy. Now let's look at the guy that made $50,000. He went from 49% to 44%. Wow! he paid $2,000 less. So, with Reagan the middle class got screwed when it came to taxes. Now, let's look at the brackets.
1981 taxes:
$5,001 paid 14%
$50,001 paid 49%
$225,001 paid 77%
All changed in 1982, the rich got richer:
$5,001 paid 12%
$50,000 paid 44%
$225,000 paid 50% (look at this and tell me who made out)
In the next 5 years nothing changed except the upper range income got higher and drove the top earners in 1982 of $85,600 to a lower bracket of 42%. That guy went down 8% but the $5,001 guy only went down one percentage point to 11%.
In 1987, also under Reagan, the top dropped down again. It went from 50% down to 38.5%. Now let's see what Reagan did for the rich. Under Reagan the top tax rate went from 77% down to 38.5%. That is a total decrease of 38.5 points or a 50% decrease. Reagan cut the taxes for the in HALF, and he considered the rich s anyone with a taxable income of over $45,000.
In 1988 the top rate went down again to 28% and it started at $113,300. That means the top tax bracket has now gone down, under Reagan, by 49 points. That is a total decrease for the rich of 64% in taxes.
So, in 1988, the taxes were:
$5,001 paid 15%
$50,001 paid 38.5%
$225,001 paid 38.5%
In 1989:
$5,001 paid 15%
$50,001 paid 33%
$225,001 paid 28% (A 15% rate bubble allowed a recapture from the
middle class of the discount to the rich)
Except for that rate bubble that expired in 1991, everything stayed close to the same till 1993. Under Clinton the three brackets went up a bit to five brackets and the top rate went back to 39.6%. The top bracket was 39.6% until 2001 when it went , under George W. Bush, to 39.1%, then in '02 to 38.6, and in '03 to 35%, where it has been until now.
In 2013 we will be celebrating the one hundredth birthday of the Federal Income Tax system. In the past 97 years the average top income tax bracket was 60.1%. For twenty years the top rate was 90% or higher. For forty nine years the top rate was 70% or higher. For sixty three of the past ninety seven years the top tax bracket has been 50% or higher.
Right now the top bracket is 35% and the wealthy is pissed off and they aren't going to put up with it any more! BULL! The rich are getting off lightly and they know it but have convinced the middle class that the rich are responsible for inventing jobs. Believe me, they are not. Demand creates jobs! Without demand for products, thee is no reason to manufacture those products. Demand comes from the people who use those products. If those people are unemployed, there is no demand.
I agree, the rich should pay 90% to income tax, but that almost never happened. That 90% rate was only on taxable income and with deductions, amortization, and reinvestment, the rich never paid much. In some cases the rich paid nothing after deductions.
Remember, just because some people are in a particular bracket doesn't mean that their taxable income will make them remain in that bracket. Warren Buffet has stated that his tax rate is less than his secretary's.
Don't let them fool you. They, the rich, are now paying less than they have paid in 90% of the life of the Federal Income Tax.
The poorer pay a lower percentage and the wealthy pay a higher percentage. Why you ask? A person that pays 10% tax on an income of $15,000, pays 100% of their discretionary income on taxes and have nothing left for retirement or anything else, like a new refrigerator or furniture. That's not good for the refrigerator and furniture manufacturers. A person that pays 10% on $100,000 pays about 25% of their discretionary income on taxes and they have lots more means to acquire deductions to lower their taxable income. But, since the middle class doesn't have any money to spend on clothes and refrigerators and furniture, investments in those areas don't draw any income. In fact, our economy requires that middle income people to have spendable income to make everything work, otherwise the rich don't have anyone to sell their products. Without demand, there are no jobs in industry. Demand creates jobs.
Let's get back to where we were in our history of the Federal Income Tax.
As stated, the income tax brackets stayed pretty stable from 1965 through 1982. There was some small variance, but mostly it was the same. The top rate for 17 years was 70%.
That all changed when Ronald Reagan became President. He cut the top rate by almost 30% from a 70% rate down to a 50% rate and he cut the highest income bracket that started at $215,000, down to $85,000. This was massive for the guy that had a taxable income of $225,000. That guy or gal paid $45,000 less in taxes in one year than in the previous. It was a gift to the wealthy. Now let's look at the guy that made $50,000. He went from 49% to 44%. Wow! he paid $2,000 less. So, with Reagan the middle class got screwed when it came to taxes. Now, let's look at the brackets.
1981 taxes:
$5,001 paid 14%
$50,001 paid 49%
$225,001 paid 77%
All changed in 1982, the rich got richer:
$5,001 paid 12%
$50,000 paid 44%
$225,000 paid 50% (look at this and tell me who made out)
In the next 5 years nothing changed except the upper range income got higher and drove the top earners in 1982 of $85,600 to a lower bracket of 42%. That guy went down 8% but the $5,001 guy only went down one percentage point to 11%.
In 1987, also under Reagan, the top dropped down again. It went from 50% down to 38.5%. Now let's see what Reagan did for the rich. Under Reagan the top tax rate went from 77% down to 38.5%. That is a total decrease of 38.5 points or a 50% decrease. Reagan cut the taxes for the in HALF, and he considered the rich s anyone with a taxable income of over $45,000.
In 1988 the top rate went down again to 28% and it started at $113,300. That means the top tax bracket has now gone down, under Reagan, by 49 points. That is a total decrease for the rich of 64% in taxes.
So, in 1988, the taxes were:
$5,001 paid 15%
$50,001 paid 38.5%
$225,001 paid 38.5%
In 1989:
$5,001 paid 15%
$50,001 paid 33%
$225,001 paid 28% (A 15% rate bubble allowed a recapture from the
middle class of the discount to the rich)
Except for that rate bubble that expired in 1991, everything stayed close to the same till 1993. Under Clinton the three brackets went up a bit to five brackets and the top rate went back to 39.6%. The top bracket was 39.6% until 2001 when it went , under George W. Bush, to 39.1%, then in '02 to 38.6, and in '03 to 35%, where it has been until now.
In 2013 we will be celebrating the one hundredth birthday of the Federal Income Tax system. In the past 97 years the average top income tax bracket was 60.1%. For twenty years the top rate was 90% or higher. For forty nine years the top rate was 70% or higher. For sixty three of the past ninety seven years the top tax bracket has been 50% or higher.
Right now the top bracket is 35% and the wealthy is pissed off and they aren't going to put up with it any more! BULL! The rich are getting off lightly and they know it but have convinced the middle class that the rich are responsible for inventing jobs. Believe me, they are not. Demand creates jobs! Without demand for products, thee is no reason to manufacture those products. Demand comes from the people who use those products. If those people are unemployed, there is no demand.
I agree, the rich should pay 90% to income tax, but that almost never happened. That 90% rate was only on taxable income and with deductions, amortization, and reinvestment, the rich never paid much. In some cases the rich paid nothing after deductions.
Remember, just because some people are in a particular bracket doesn't mean that their taxable income will make them remain in that bracket. Warren Buffet has stated that his tax rate is less than his secretary's.
Don't let them fool you. They, the rich, are now paying less than they have paid in 90% of the life of the Federal Income Tax.
Sunday, September 12, 2010
The History of the Federal Income Tax, Part 2
Now, to catch us up to where the last post left off in 1928, you must remember the price of things then as compared to now. In 1928, $20,000 was about the same as $245,000 is now. The inflation calculator is at:
www.westegg.com/inflation/infl.cgi
So, a loaf of bread cost 10¢, eggs were 20¢/doz. and milk was about 30¢ a gallon. Go to:
www.thepeoplehistory.com/20sfood.html
My three monetary categories of $5,001, $50,001 and $225,001 which would be very reasonable now were then equivalent to $62,000, $620,000 and $2,800,000. You have to remember that to break even with the income of 1928 you would now have to be making $74,000. If you are not then you have lost ground to inflation.
www.time.com/time/magazine/article/0,9171,738618,00.html
Now, on to the next few decades of tax brackets. The great stock market plunge happened in late 1929 and Republican President, Herbert Hoover, decided that we could come out of it on our own without any help from the government so he and congress didn't change the tax brackets in the first few years of the depression. When Hoover lost to Roosevelt in 1932 those brackets began to move some. In 1932 there were 55 tax brackets and the top earners paid 63% to income tax.
in 1933, things changed:
$5,001 paid 8%
$50,001 paid 31%
$225,001 paid 58%
(This was the first step to getting us out of a debilitating depression)
In 1934, the number of brackets shrank from 55 down to 30 but the top earners still paid 63%. What they did was combine most of the brackets with the one just above it and about half of us paid a percentage point or two more than the previous year.
1934 brackets:
$5,001 paid 9%
$50,001 paid 34%
$225,000 paid 58%
By 1936, the wealthy still weren't creating jobs so the Federal Government started with CCC programs and various other job creating plans. Along with this, Congress decided to punish the wealthy by raising the rate the top earners had to pay.
in 1936:
$5,001 paid 8%
$50,001 paid 45%
$225,000 paid 66%
(the top bracket paid 79% which jumped up from 63%)
In 1940, knowing full well that war was coming, a defense tax was imposed. An additional 10% surtax was levied to help with the war effort.
By 1942, we were in the war on two fronts. We declared war against Japan on December 8, 1941 and against Germany on December 11, 1941. We didn't declare war against the rest of the Axis powers till June 5, 1942. The top wage earner rate in 1942 jumped again from 79% to 88% and that was for anyone making over $200,000. So, what they did was raise the top rates and lower the bracket incomes so that everyone got a hike.
In 1942, these were the rates:
$5,001 paid 26% (this was over triple the '36 rate)
$50,001 paid 72% (almost double the '36 rate)
$225,001 paid 88% (about a 35% increase)
The brackets rose only slightly in 1944 with the top bracket paying 94% income tax. In 1946, the income tax brackets were passed and then reduced by about 5% to help spur the economy. The top bracket was originally 91% but was reduced to 85.5% along with a proportionate reduction in the other brackets. Even higher reductions were made in '47, '48, '49 and '50.
In June of 1950, we entered the U. N. Police Action against North Korea and had lots of war obligations but the tax rate was about as high as it could get. Even the lowest bracket was in excess of 20%. The government started reducing the discount on taxes, which originally brought the tax rates down and now made the rates what they were originally.
In 1954, the government tweaked the tax brackets and they stayed the same for several years.
In 1954:
$5,001 paid 26%
$50,001 paid 75%
$225,001 paid 91%
Remember, this was during the Eisenhower years.
This stayed the same till the revenue act of 1964 was passed. This was a substantial reduction in all brackets.
In 1964:
$5,001 paid 23.5% (a 10% reduction)
$50,001 paid 66% (a 12% reduction)
$225,000 paid 77% (a 15% reduction)
The revenue tax rates of 1964 stayed in effect, except for surtaxes, till 1969 when the Marriage Penalty came into effect. Those surtaxes were 7.5% in '68, 10% in'69 and 2.5% in '70.
Tax rates and tax brackets stayed pretty stable till 1982. That's where we'll pick this up in my next post. Ronald Reagan really brought the tax for the upper crust down . . . all the way to 50%! WOW . . . 50%
I think you are beginning to see where we are going here. The rich and super rich are pissing and moaning about the high tax rates now but most of them have so many reductions and expenses to deduct that they pay about half their rates and lots of them pay nothing. Individuals don't have the business expenses to deduct that small business owners have.
Wait till you see what's coming next!
The conclusion and whole point of this is at:
http://swoopsfromsnowyowl.blogspot.com/2010/09/history-of-federal-income-tax_16.html
www.westegg.com/inflation/infl.cgi
So, a loaf of bread cost 10¢, eggs were 20¢/doz. and milk was about 30¢ a gallon. Go to:
www.thepeoplehistory.com/20sfood.html
My three monetary categories of $5,001, $50,001 and $225,001 which would be very reasonable now were then equivalent to $62,000, $620,000 and $2,800,000. You have to remember that to break even with the income of 1928 you would now have to be making $74,000. If you are not then you have lost ground to inflation.
www.time.com/time/magazine/article/0,9171,738618,00.html
Now, on to the next few decades of tax brackets. The great stock market plunge happened in late 1929 and Republican President, Herbert Hoover, decided that we could come out of it on our own without any help from the government so he and congress didn't change the tax brackets in the first few years of the depression. When Hoover lost to Roosevelt in 1932 those brackets began to move some. In 1932 there were 55 tax brackets and the top earners paid 63% to income tax.
in 1933, things changed:
$5,001 paid 8%
$50,001 paid 31%
$225,001 paid 58%
(This was the first step to getting us out of a debilitating depression)
In 1934, the number of brackets shrank from 55 down to 30 but the top earners still paid 63%. What they did was combine most of the brackets with the one just above it and about half of us paid a percentage point or two more than the previous year.
1934 brackets:
$5,001 paid 9%
$50,001 paid 34%
$225,000 paid 58%
By 1936, the wealthy still weren't creating jobs so the Federal Government started with CCC programs and various other job creating plans. Along with this, Congress decided to punish the wealthy by raising the rate the top earners had to pay.
in 1936:
$5,001 paid 8%
$50,001 paid 45%
$225,000 paid 66%
(the top bracket paid 79% which jumped up from 63%)
In 1940, knowing full well that war was coming, a defense tax was imposed. An additional 10% surtax was levied to help with the war effort.
By 1942, we were in the war on two fronts. We declared war against Japan on December 8, 1941 and against Germany on December 11, 1941. We didn't declare war against the rest of the Axis powers till June 5, 1942. The top wage earner rate in 1942 jumped again from 79% to 88% and that was for anyone making over $200,000. So, what they did was raise the top rates and lower the bracket incomes so that everyone got a hike.
In 1942, these were the rates:
$5,001 paid 26% (this was over triple the '36 rate)
$50,001 paid 72% (almost double the '36 rate)
$225,001 paid 88% (about a 35% increase)
The brackets rose only slightly in 1944 with the top bracket paying 94% income tax. In 1946, the income tax brackets were passed and then reduced by about 5% to help spur the economy. The top bracket was originally 91% but was reduced to 85.5% along with a proportionate reduction in the other brackets. Even higher reductions were made in '47, '48, '49 and '50.
In June of 1950, we entered the U. N. Police Action against North Korea and had lots of war obligations but the tax rate was about as high as it could get. Even the lowest bracket was in excess of 20%. The government started reducing the discount on taxes, which originally brought the tax rates down and now made the rates what they were originally.
In 1954, the government tweaked the tax brackets and they stayed the same for several years.
In 1954:
$5,001 paid 26%
$50,001 paid 75%
$225,001 paid 91%
Remember, this was during the Eisenhower years.
This stayed the same till the revenue act of 1964 was passed. This was a substantial reduction in all brackets.
In 1964:
$5,001 paid 23.5% (a 10% reduction)
$50,001 paid 66% (a 12% reduction)
$225,000 paid 77% (a 15% reduction)
The revenue tax rates of 1964 stayed in effect, except for surtaxes, till 1969 when the Marriage Penalty came into effect. Those surtaxes were 7.5% in '68, 10% in'69 and 2.5% in '70.
Tax rates and tax brackets stayed pretty stable till 1982. That's where we'll pick this up in my next post. Ronald Reagan really brought the tax for the upper crust down . . . all the way to 50%! WOW . . . 50%
I think you are beginning to see where we are going here. The rich and super rich are pissing and moaning about the high tax rates now but most of them have so many reductions and expenses to deduct that they pay about half their rates and lots of them pay nothing. Individuals don't have the business expenses to deduct that small business owners have.
Wait till you see what's coming next!
The conclusion and whole point of this is at:
http://swoopsfromsnowyowl.blogspot.com/2010/09/history-of-federal-income-tax_16.html
Friday, September 10, 2010
The History of the Federal Income Tax
You might want to have a secondary title for this of "How The Rich Keep Getting Richer."
Recently I decided to go back and see what has happened to the income tax brackets in the past, especially the bracket for the upper income area. You are going to be surprised at what I found.
First a bit of history; Federal Income Tax took effect after the 16th Amendment to the Constitution was passed and ratified in February of 1913. The Republican President , William Howard Taft, in an address to Congress in 1909, proposed a 2% income tax on corporations. The Congress took up the gauntlet and went all the way with an income tax on Corporations and Individuals. It was ratified by the necessary ¾ of the states and was enacted just before Woodrow Wilson took office in March 1913. As a sidebar; Arkansas and New Hampshire first rejected it and then came back and ratified it later. Connecticut, Rhode Island and Utah considered it but have never ratified the 16th Amendment. On the other hand; Florida, Virginia and Pennsylvania not only have never ratified it but they never even considered it.
I would like to take a look at various income brackets for the following amounts of income; $5,001/year, $50,001/year, and $225,001/year. I am not going to figure for inflation but you can figure that in 1913 $5,000/year went a lot farther than it does today, in fact it was a good sum of money. You might want to figure also that $50,000/year was more than 98% of the population made and that $225,001 was a fortune that only the top .01% were capable of making. Those are the three incomes I'll be looking at in this essay. I will not be looking at the deductions that people qualified for but you must remember that the more people make the more deductions they qualify for and the income tax is only on income after deductions. The top earners had lots of deductions to bring their taxable income down and the lower income had few.
I will most likely have to do this post in two editions (maybe more) because it will be longer than most.
Let's go back to the beginning, here is 1913;
$5,001 paid 1%
$50,001 paid 2%
$225,001 paid 5%
In 1916, with war on the way, the brackets were expanded a bit and most paid double what they paid earlier;
$5,001 paid 2%
$50,001 paid 4%
$225,001 paid 9%
The very next year, 1917, we were in war and things changed;
$5,001 paid 5%
$50,001 paid 16%
$225,001 paid 41%
In 1918, Congress found a gold mine in the income tax and they needed it to pay off the mounting debt the war brought on and the original 7 brackets had now expanded to 56 brackets and the top earners were paying through the nose;
$5,001 paid 13%
$50,001 paid 36%
$225,001 paid 72%
(The top bracket was at 77%)
In 1924, the war had been substantially paid off but the money was flowing and who could resist? The brackets have now shrunk to only 43 from the 56 in 1918;
$5,001 paid 4%
$50,001 paid 24%
$225,001 paid 44%
In 1928, the roaring '20s were in full swing and income taxes had now gone down to a very low rate compared to what it was in the early '20s. The U. S. at this time had a Republican President since 1921 and the rich were rolling in the dough;
$5,001 paid 3%
$50,001 paid 18%
$225,000 paid 25%
As you can see, just prior to the great depression, the wealthy had it made. That didn't bring on the depression but it didn't help either. It just shows that a low income tax rate for the rich doesn't create wealth in any class but the already rich. It also shows that without regulations, the wealthy will let the economy go to hell. Deregulation brings on unbridled greed and the end of a positive economy.
(The next issue of this post will come in about 2 days. There are some amazing things that you will not beleive in that post.)
I got the history of the income tax and the bracket history at:
www.taxfoundation.org/publications/show/151.html
www.ustreas.gov/education/fact-sheets/taxes/ustax.shtml
The second part of this post is at:
http://swoopsfromsnowyowl.blogspot.com/2010/09/history-of-federal-income-tax-part-2.html
Recently I decided to go back and see what has happened to the income tax brackets in the past, especially the bracket for the upper income area. You are going to be surprised at what I found.
First a bit of history; Federal Income Tax took effect after the 16th Amendment to the Constitution was passed and ratified in February of 1913. The Republican President , William Howard Taft, in an address to Congress in 1909, proposed a 2% income tax on corporations. The Congress took up the gauntlet and went all the way with an income tax on Corporations and Individuals. It was ratified by the necessary ¾ of the states and was enacted just before Woodrow Wilson took office in March 1913. As a sidebar; Arkansas and New Hampshire first rejected it and then came back and ratified it later. Connecticut, Rhode Island and Utah considered it but have never ratified the 16th Amendment. On the other hand; Florida, Virginia and Pennsylvania not only have never ratified it but they never even considered it.
I would like to take a look at various income brackets for the following amounts of income; $5,001/year, $50,001/year, and $225,001/year. I am not going to figure for inflation but you can figure that in 1913 $5,000/year went a lot farther than it does today, in fact it was a good sum of money. You might want to figure also that $50,000/year was more than 98% of the population made and that $225,001 was a fortune that only the top .01% were capable of making. Those are the three incomes I'll be looking at in this essay. I will not be looking at the deductions that people qualified for but you must remember that the more people make the more deductions they qualify for and the income tax is only on income after deductions. The top earners had lots of deductions to bring their taxable income down and the lower income had few.
I will most likely have to do this post in two editions (maybe more) because it will be longer than most.
Let's go back to the beginning, here is 1913;
$5,001 paid 1%
$50,001 paid 2%
$225,001 paid 5%
In 1916, with war on the way, the brackets were expanded a bit and most paid double what they paid earlier;
$5,001 paid 2%
$50,001 paid 4%
$225,001 paid 9%
The very next year, 1917, we were in war and things changed;
$5,001 paid 5%
$50,001 paid 16%
$225,001 paid 41%
In 1918, Congress found a gold mine in the income tax and they needed it to pay off the mounting debt the war brought on and the original 7 brackets had now expanded to 56 brackets and the top earners were paying through the nose;
$5,001 paid 13%
$50,001 paid 36%
$225,001 paid 72%
(The top bracket was at 77%)
In 1924, the war had been substantially paid off but the money was flowing and who could resist? The brackets have now shrunk to only 43 from the 56 in 1918;
$5,001 paid 4%
$50,001 paid 24%
$225,001 paid 44%
In 1928, the roaring '20s were in full swing and income taxes had now gone down to a very low rate compared to what it was in the early '20s. The U. S. at this time had a Republican President since 1921 and the rich were rolling in the dough;
$5,001 paid 3%
$50,001 paid 18%
$225,000 paid 25%
As you can see, just prior to the great depression, the wealthy had it made. That didn't bring on the depression but it didn't help either. It just shows that a low income tax rate for the rich doesn't create wealth in any class but the already rich. It also shows that without regulations, the wealthy will let the economy go to hell. Deregulation brings on unbridled greed and the end of a positive economy.
(The next issue of this post will come in about 2 days. There are some amazing things that you will not beleive in that post.)
I got the history of the income tax and the bracket history at:
www.taxfoundation.org/publications/show/151.html
www.ustreas.gov/education/fact-sheets/taxes/ustax.shtml
The second part of this post is at:
http://swoopsfromsnowyowl.blogspot.com/2010/09/history-of-federal-income-tax-part-2.html
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