Imagine a committed (maybe even a radical) progressive finding himself in a country which taxes incomes over, say $500,000 at the 99% tax rate. Would he start to demand lower taxes on the rich? Not bloody likely, and this is a confiscatory tax regime.
By the way, the marginal income tax rate in the US on incomes over $100k was 92% in 1953, and 70% on incomes over $108k until 1981, when Reagan first started trading taxes for deficits.
Sure, 92% on $1.7m/yr it’s not quite 99% on $500k/yr, as in your example, but it’s not too far off, and it is interesting to examine how people on different sides of the political spectrum reacted to it. I don’t know if any of the “progressives” (meaning leftists?) demanded lower taxes back then.
By the way, the marginal income tax rate in the US on incomes over $100k was 92% in 1953, and 70% on incomes over $108k until 1981, when Reagan first started trading taxes for deficits.
Source.
From your source, in 1953 the marginal tax on ordinary income over $200K was 92% for single filers and that’s $1.7m in today’s dollars.
I do wonder how many people were in this tax bracket. For the rich most of their income was dividends and capital gains—not part of ordinary income.
Sure, 92% on $1.7m/yr it’s not quite 99% on $500k/yr, as in your example, but it’s not too far off, and it is interesting to examine how people on different sides of the political spectrum reacted to it. I don’t know if any of the “progressives” (meaning leftists?) demanded lower taxes back then.
By the way: a nice graph and an amusing fact:
The Wealth Tax Act of 1935, applied the top rate to income over $5 million and had only a single taxpayer: John D. Rockefeller, Jr.