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[–] mcwilshire 17 points 76 points (+93|-17) ago  (edited ago)

In 1950, Federal, state, and local revenue were 20.4% of the GDP.

It is now 34% of GDP.

In 1950, combined Federal, state, and local revenue was $63 billion, which is $622 billion in today's dollars, from a workforce of 62 million people.

Today, combined Federal, state, and local revenue is $6.1 trillion from a workforce of 157 million people.

That's almost a 10x increase in government revenue and nearly 4x increase per worker.

So no, taxes are not lower now. Government was much smaller, and taxes were lower.

http://www.usgovernmentrevenue.com/

As far as the top marginal rate, today, for every $100 that the Federal government collects in income taxes, $90 comes from the top 25% of earners. The bottom half chip in $3. That's today, with the current policies. That's not even talking about taxes on corporate profits, capital gains, and inheritance (guess who pays those - hint: it ain't the poor). Tax the rich? Yeah that's already how it works. The top 20% are responsible for essentially all of the government's financial support already.

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[–] HASTAG_GAY_PORN 2 points 8 points (+10|-2) ago 

My rebuttal consists of two words: government pensions. The US employs so many government workers that do literally do nothing and collected $1.2 trillion last year. They need to cut some of these utterly useless bureaucratic agencies because these people are collecting so much goddamn money for doing absolute shit. I'm looking at you TSA, NSA, DEA, EPA. They seriously just hemmorhage money like it's no tomorrow then get paid out the wazoo for their "great public service". Fuck the current bureaucracy. I think the American people would be willing to spend on agencies that actually benefit the people instead of glorified pencil pushers and people killing/spying on them.

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[–] poodog 0 points 11 points (+11|-0) ago 

But without the TSA who is going to make air travel a fucking nightmare?!

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[–] Terkan 1 point 4 points (+5|-1) ago 

Or how about that.... useless crappy, F-35 program. Or how about those 2 wars America started. 5 trillion right there. (including of course 20 billion on air conditioning tents in a desert) I'd be happy to have some extra government workers if it means there's some oversight on Wall Street so they don't crash the goddamn economy again and requiring the Federal Government (taxpayers) to pay up and bail them out.
The bailouts were just about as much as the damn Wars.

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[–] idle_voating 2 points 1 point (+3|-2) ago 

Environmental protection and limiting pollution is an important thing to do, and the EPA are a terrible organization to hand the job to. The movement that lead to the formation of the EPA along with the clean air clean water acts was started when a river caught on fire due to all of the crap in it.

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[–] flyawayhigh ago  (edited ago)

My rebuttal consists of two words: No Way. :)

I can tell you immediately that 1.2 trillion in federal employee pensions is wrong. Why? Look at the budget pie chart. There is simply no room for anything even remotely like that number.

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[–] cynoclast [S] 38 points 5 points (+43|-38) ago 

It is now 34% of GDP.

And the GDP is what % larger? 5890% larger. So the portion of it grew slightly, but the size of the pie grew astronomically.

That's almost a 10x increase in government revenue and nearly 4x increase per worker.

I love how you talk about how the worker is paying more in taxes, then go on to say that it's the rich that pay the most. The shift of the tax burden to the working class is right there in your own post.

The top 20% are responsible for essentially all of the government's financial support already.

Well, they should be, because they're also receive a majority of the income. it just makes sense. I say this as a member of the top 20%.

As far as the top marginal rate, today, for every $100 that the Federal government collects in income taxes, $90 comes from the top 25% of earners.

And the payroll tax?:

Typically when politicians fight about taxes, they fight about the income tax. That is to say, they fight about the tax that rich people hate — not the taxes poor people hate.

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[–] ForgotMyName 3 points 30 points (+33|-3) ago 

I can't blame /u/mcwilshire for not bothering, but here are some hints -

And the GDP is what % larger? 5890% larger. So the portion of it grew slightly, but the size of the pie grew astronomically.

You're trying to justify a 75% increase in government overhead in relationship to GDP by saying that GDP increased? How does that make ANY sense? He used percentages rather than numbers in the first place because the whole point is that they'll remain proportional. Regardless of inflation, fluctuation in GDP, etc, those ratios don't lie. Government spending in relation to GDP is up 75%. That's ridiculous.

I love how you talk about how the worker is paying more in taxes, then go on to say that it's the rich that pay the most. The shift of the tax burden to the working class is right there in your own post.

sigh. No, he didn't do this. He said that it averages out to a 4x increase per worker. He never claimed that each worker is actually paying that increase. Obviously who is actually paying it will be determined by tax law, however, an average increase of 4x / worker is still completely ridiculous. I don't care if only the top 1% are covering that increase. Where is all of that extra money going?

We have massive problems in our government with respect to spending. The entire way budgeting works is fundamentally broken - use it or lose it. There is zero motivation for anyone to find any savings. Cronyism, kickbacks, and "consultant position" type corruption are rampant. All of this ignores the ridiculous pension system and how unbelievably easy it is for abysmal employees to remain employed. Government spending has long since surpassed any sort of justification. We desperately need to clean house.

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[–] mcwilshire 20 points 12 points (+32|-20) ago 

I can't even respond to this it's so incoherent, sorry.

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[–] flyawayhigh 2 points 2 points (+4|-2) ago  (edited ago)

Also note the year chosen:1950.

1950 was the very beginning of the best years of shared American prosperity.That is no accident by the unnamed source of these deceptive facts. The source of this data is MANHATTAN INSTITUTE

Notice too the mathematical slight of hand. The first part uses GDP percentages, the second part uses current dollars -- in other words, it completely ignores inflation. Is it an accident that two opposite systems are used to make these points?

A more reasonable numerical analysis would pick a few dates throughout the amazing period of growth, and of course, to use consistent mathematical methods . If that were done,we would find that the size of governments in terms of GDP ratio stayed about the same. Then, we would have to go back to the drawing board and look for other factors -- tax cuts, increasing wars, consolidations, international trade policies, etc. :)

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[–] fuckingkike ago  (edited ago)

And the payroll tax?

The payroll tax is partly a prepayment on income tax, and it is supplanted by corporate and estate taxes at higher incomes. The rich rely less on their payroll salaries and so pay a smaller proportion of their income in payroll taxes. Not really a big deal unless you're trying to be sensationalistic.

http://www.taxpolicycenter.org/taxtopics/images/Figure-2-Final_13.gif

The total effective tax rate is really what's important because it describes the net takehome income relative to total earnings.

Edit: taxes relative to total increase in net worth would also be a very good metric.

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[–] voative 0 points 2 points (+2|-0) ago 

We also led the world in exports in the 50's - 60's

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[–] mcwilshire 0 points 1 point (+1|-0) ago 

That was easy when China was a rice paddy and Europe and Japan were smoldering ruins.

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[–] flyawayhigh 0 points 1 point (+1|-0) ago  (edited ago)

Comment Rating: DECEPTIVE.

  1. Information directly pulled from Koch brothers think tank Manhattan Institute. Just search the text in the comment,and you will see for yourself.

  2. Comment fails to cite the source. Unless we believe the person making the comment came up with all this nifty and specific information on the fly, and just happened to produce the samepoints of the Manhattan Institute, it is safe to say we found the source.

  3. 1950 is before all of the great strides in growth and standard of living across the board. A better comparison would include a few dates actually during the period.

  4. Blatant and grotesque math tricks. The GDP point includes inflation as a factor, but the growth in revenue portion does not.

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[–] mcwilshire 1 point 1 point (+2|-1) ago  (edited ago)

Information directly pulled from Koch brothers think tank Manhattan Institute. Just search the text in the comment,and you will see for yourself.

You mean historical budget data which you're free to corroborate or challenge based on more reliable sources if you believe they exist...

Comment fails to cite the source. Unless we believe the person making the comment came up with all this nifty and specific information on the fly, and just happened to produce the samepoints of the Manhattan Institute, it is safe to say we found the source.

As cited: http://www.usgovernmentrevenue.com/

1950 is before all of the great strides in growth and standard of living across the board. A better comparison would include a few dates actually during the period.

I'm using the same year as OP's article.

Blatant and grotesque math tricks. The GDP point includes inflation as a factor, but the growth in revenue portion does not.

... that's because the percentage of GDP is 1950's revenue as a share of 1950's GDP, and 2015's revenue as a share of 2015's GDP... what would you have me do? If I inflation adjust both 1950's revenue and GDP to 2015 dollars (a pointless exercise), the percentage remains the same. It's still 20.4% of GDP.

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[–] poodog 0 points 34 points (+34|-0) ago 

And every other industrial nation had been bombed into the Stone Age thanks to Ww2

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[–] edistojim 4 points 10 points (+14|-4) ago 

Now thats an inconvenient truth.

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[–] BoiseNTheHood 5 points 1 point (+6|-5) ago 

:DDDDDDDDDDDDDDDDDDDDDDDDDDDDDD

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[–] Broc_Lia 0 points 1 point (+1|-0) ago 

This all the way. It's like saying that Eisenhower was a general, so we need a president from the military to solve everything, or Fast Food was more popular back then and economic prosperity is caused by burgers. Strong unions do not a versitile economy make.

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[–] CobaltThoriumG ago 

So... we need some more world wars you say? ;)

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[–] 9-11 10 points 31 points (+41|-10) ago  (edited ago)

when top brackets were at 90% america built the eisenhower interstate system, put a man on the moon, pulled the world into the modern era, and defeated communism.

https://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_top_rates

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[–] mcwilshire 19 points 10 points (+29|-19) ago 

The Fantasy of a 91% Top Income Tax Rate

Today, for every $100 that the Federal government collects in income taxes, $90 comes from the top 25% of earners. The bottom half chip in $3. That's today, with the current policies. That's not even talking about taxes on corporate profits, capital gains, and inheritance (guess who pays those - hint: it ain't the poor). Tax the rich? Yeah that's already how it works. The top 20% are responsible for essentially all of the government's financial support already.

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[–] mudcatca 0 points 15 points (+15|-0) ago  (edited ago)

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[–] cynoclast [S] 15 points 4 points (+19|-15) ago  (edited ago)

Wall Street Journal saying the rich are paying plenty....no way!

edit: A more reasonable source: http://www.vox.com/2015/4/15/8406605/payroll-tax-income-tax

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[–] greycloud ago 

now it is the 80-90% group that pays all the taxes. lets just look at the top 10% instead of the top 20%. the top 10% take in 90% of all money made in the US and pay 60% of the taxes. the middle class is their slaves. i am not saying tax the guy who makes $250,000 a year more, i am saying tax the guy that makes in excess of 10 million dollars per year a whole lot more.

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[–] AverageAmerica ago 

Perhaps we shouldn't argue about taxes until we remake our economy in a just and sustainable manner:

Reform department of defense into a loose coalition of state run militias. Close down all over sea bases.

End the war on drugs, disband the DEA.

Fold all intelligence organizations into the FBI where proper rules and oversight will happen. We are not at war with a country. (This does not make me a fan of the FBI, and is merely a stop gap measure until we can shut down the FBI as well if possible)

Stock trading taxes (stops high frequency computer trading)

Let the economic chips fall where they may. Then we can discuss income tax rates.

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[–] Gargilius 4 points 5 points (+9|-4) ago  (edited ago)

top brackets were at 90% ... defeated communism

Isn't that a self contradiction?

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[–] l-emmerdeur 3 points 10 points (+13|-3) ago 

That's like saying drinking wine is Christianity, because they do it in communion.

A high tax rate on the top earners is not communism. Your comment betrays your lack of understanding on the subject.

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[–] mcwilshire 2 points 9 points (+11|-2) ago 

It's the top marginal rate, and almost no one paid it. It's one of those bullshit numbers some people like to throw around, like "1 in 4 women", "97% of climate scientists", and "77 cents on the dollar".

Taxes were much lower in 1950 than they are today.

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[–] DickHertz ago 

No.

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[–] 9-11 ago 

i would explain it to you, but you are either not old enough to have had econ 101 or you didnt understand it when you did....

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[–] MysteryMeat 0 points 1 point (+1|-0) ago  (edited ago)

The top tax rate was over 90% for 11 years. It averaged 80% from 1932 through 1981 (50 years!), and was 50% until 1987.

I wouldn't wish these taxes on anyone. However it does demonstrate that raising taxes on the very wealthy does not have an adverse affect on jobs. The top 0.1% have been doing extremely well since the Bush tax cuts in 2001/2003 and jobs didn't follow. Can we stop calling them "job creators" now?

Also, there of course were other factors for why we had our golden age, it's not like the top tax rate alone made us great.

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[–] 9-11 ago 

that tax rate would only apply to the dollars you made over $2.41 million per year (2015 money) in 1946. so if you made $2,410,001 .... only that $1 would get taxed at 91%, all the other 2.41 million would get taxed at each bracket which was lower.

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[–] fuck_communism ago 

Nobody paid anything close to the 90% marginal rate, thanks to an abundance of tax shelters.

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[–] 9-11 ago 

only the people who hated america and wanted the nazis to win did that though.

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[–] Dereliction 3 points 20 points (+23|-3) ago 

America was great when a person could move far enough west that the government couldn't say how he or she should live. But there's no getting back to those days.

[–] [deleted] 1 point 3 points (+4|-1) ago 

[Deleted]

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[–] Dereliction 3 points 0 points (+3|-3) ago  (edited ago)

By the time railroads and "railroad towns" arrived in the west, right alongside it came the government. The expansion of both were inseparable. As such, Federal influence in the west was increasingly felt by the late 1800s. Before the advent of railroads, not so much.

There also weren't many children in the west before the railroads. Even when they did appear, the vast majority of industrial child labor still occurred in the east, fed by newly arrived immigrants, fueling northern factories and mills, and of course coal mines inside Pennsylvania, Illinois and Maryland.

Your comment has lots of snark, less so truth and nuance. Welcome to the Internet, eh?

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[–] Buttershine 2 points -1 points (+1|-2) ago 

Lol, such a great post.

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[–] dv1155 1 point 16 points (+17|-1) ago 

Someone already debunked the idiotic "90% tax rate" crap earlier in the thread. Let me just add that there were FEWER taxes in the 1950s. Most states had NO sales tax in the 50s, today you pay 6-12% on everything you buy. In the 50s there were no BS taxes on phone, cable, internet, hotel rooms, etc etc. Your average american middle classer pays far, far, far more taxes today than sixty years ago.

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[–] MoonMansWay 3 points 5 points (+8|-3) ago 

Yeah, but logic and reason is not a staple of the new liberal. This is one of their biggest recruiting "facts". It contributed to making me spout all their bullshit when i was in highschool. Thankfully I grew upand realized I wasnt thinking for myself and it was all just part of an angsty phase.

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[–] [deleted] 1 point 11 points (+12|-1) ago  (edited ago)

[Deleted]

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[–] AverageAmerica 1 point 4 points (+5|-1) ago  (edited ago)

We need Fair trade not "Free" trade - Countries that does not meet or exceed the same environmental and labor protections that we offer will have a trade tariff levied on all goods coming into or out of the USA. Want to do business with or in the USA? Join us in the 21st century. There was once a time that 95% of the federal government was financed by trade tariffs.

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[–] ForgotMyName 0 points 2 points (+2|-0) ago 

Good luck with that. Our definitions of human rights violation and environmental catastrophe seems to strongly depend upon politics and money.

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[–] mcwilshire 1 point 2 points (+3|-1) ago 

Free Trade fucked this country in the long run.

Utter nonsense.

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[–] ForgotMyName 1 point 1 point (+2|-1) ago 

Free trade absolutely screwed us. People solely blaming GW Bush for the recession need to look at who signed NAFTA and who removed Glass-Steagall. (Don't get me wrong, I don't like Bush, but my point is that this is a problem that both parties have perpetuated.)

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[–] Broc_Lia ago 

Free Trade fucked this country in the long run.

Agreed accept for this bit. The rest of the world catching back up with US industry was inevitable, and without free trade the US would simply be overtaken. You'd be living in a backwards world of locally manufactured 1970s era technology and unable to afford foreign imports light years ahead of anything coming out of a US factory. Allowing free trade and US companies to outsource means that America is riding the wave and at least keeping the tertiary sector jobs at home. Eventually things will balance out and the cost of living in the east will rise to match that in the west, but until then there simply is no way to recreate the success of the 1950s. Not unless you can convince someone to bomb every industrialised nation into the stone age, which frankly would be bad for everyone, America included.

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[–] Darmoth 0 points 10 points (+10|-0) ago 

Here comes this myth again. Every couple weeks.

Whats important is how much money is being taken out of the economy in the form of taxes. The marginal income rate has fluctuated widely over the years, but the portion of GDP that becomes revenue for the government has hardly ever budged. Government revenue over the last 80 years has always remained between 16-18.5% of GDP regardless of what the top earners marginal rate has been. In fact, years that show the highest percent of revenue don't even correspond very well with the years that marginal rates were the highest.

Its also important to realize we have a MARGINAL rate system. No one ever paid 90% of the income in taxes. No one grossed 10m dollars and paid 9m to the government. It doesn't matter what you set rates to if people don't pay that rate.

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[–] cynoclast [S] 2 points -2 points (+0|-2) ago 

It doesn't matter what you set rates to if people don't pay that rate.

But people do, a tiny, tiny minority, which in a democracy should be overruled and required to pay, precisely because there are so few. But he sums involved at that point are gigantic, intentional, and completely fair. All the more so because it's a marginal rate. So by your own reasoning, it does matter.

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[–] Darmoth 0 points 2 points (+2|-0) ago 

Maybe on principle, but its mostly just a waste of time/distraction issue. The money we are losing by having such a monstrosity of a tax burden that drive money out of the country would make the amount we are "losing" through "loopholes" look like chump change. Having a system that isn't so repulsive to growth would be much more effective for everyone.

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[–] Broc_Lia ago 

Fuck democracy. It's no better than monarchy.

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[–] TheFerretman 1 point 6 points (+7|-1) ago 

.....and the rest of the world's factories and economies had pretty much been blown up.

Liberals keep leaving that part out.

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