View RSS Feed


Why did the economy boom during the 1950's when the top tax rate was 91%?

Rate this Entry
Originally posted here:

A guest member asked: Why did the economy boom during the 1950's when the top tax rate was 91%?

For the sake of argument, let's say you statement is correct, that the economy did boom when there was a top tax rate of 91%.

Question- does that make it right? Did the people being taxed 91% agree to this? One can presume they didn't, so what is the justification for this tax? Does the benefit to the whole ("the economy") make it morally and ethically acceptable to tax someone at 91%? What about 92%? Or 93%, 94%, ... 99%? Why not just take it all if it makes the economy boom? Why not, since that is the objective here.

So let's say that the people being taxed 91% didn't agree to this, but were fine paying for services they utilized such that they helped pay for the roads they use, they pay for local fire and police protection, patent filling fees, court costs and such. Let's say this voluntary exchange doesn't come close to 91%, should the rest still be taken? Can you explain how it makes it right for a group of people to lay claim to the wages and earnings of someone else in this case? Remember, the government is nothing more than a group of people.

Another question- if one person doesn't have the right to do something to someone else, how could a group of those same people have the right? It doesn't make sense, does it? One person can't, two people can't, three can't, and so on, there is no magic number that suddenly makes it OK. Regardless of the group size, taking from others violates the principle of self-ownership, which is that you own yourself and the product of your work. Other people do not own you, or the fruits of your labor, just like you do not own theirs. Many consider the principle of self-ownership as a natural right.

Again, for augments sake, let's say that you wanted to take the 91% anyway, we'll end up with some questions similar to other situations:

- Assuming someone is running their own business, how would you propose that these taxes be collected?
- Would you expect for everyone to comply and pay their taxes, at whatever rate the group decides they owe?
- Would you support going door to door to confiscate the tax money if people did not pay?
- Would you support breaking into peoples homes if they did not answer the door?
- Would you support using aggressive measures against individuals to separate them from their money within their homes?
- Would you support killing people to get their tax money, if that's what it took?
- Do you support an ideology that generates war? If you answer "yes" to the previous question you are in fact foresting war. As well, if you're willing to fully disregard what others consider as a natural right, you're fostering war.

Let's say you're willing to brush off the principle of self-ownership anyway and establish a suitable collection / punishment structure to get the taxes, and so now you're getting the 91% rate. Are all the problems solved? Not quite, since with taxing at 91% you'll run into other issues. As a simple example, say we're considering a tomato grower and for every 10 tomato plants they grow the collection system took 9 of them, why would this person want to continue to grow tomatoes? Do you think that they may decide it's too much work for what they get and just give up, or maybe they'll start to hide their production, thus requiring a larger collection / punishment structure to prevent cheating the system? So, really, where are you going to draw the line? Can you see there are consequences for violating the principle of self-ownership?

So what can be done if you're not happy about the status quo, and see thing as the rich getting richer? Plenty can be done. Here, let's consider a three step process:

1. Understand and respect the natural rights bestowed upon us as related to the issue.
2. Devise good government policy (which does not violate step #1).
3. Devise an effective personal social policy.

So for step one, we can see that the principle of self-ownership prevents the taking of others earnings. Step two is where things start to get interesting, and is at the heart of the "rich getting richer" issue in that government policy / law is quite often manipulated by the elite wealthy class for their own self serving interests. This is what needs to stop, and it can be done. There are some clear and obvious examples of this such as corporate handouts, special privileges that only corporations enjoy, manipulation of regulations to benefit big corporations, manipulation of trade agreements and so on. These need to stop.

There is one major root problem however, the Federal Reserve System, which puts the control of our entire money supply into the hands of seven people. Seven. We tend to be feed information that these board members are looking out for the best interests of the country but many here say they end up serving the interest of the elite banking class allowing for easy profits of countless billions a year. Talk about the rich getting richer...

Consider the possibility that the seven board members, who are each serving 14 year terms, pre-plan out the highs and lows of interest rates for the next 8 years, a road-map of sorts, and only share that with an elite few. Do you have any idea how much that information would be worth? That's just the beginning of the problems with the Federal Reserve System, I highly recommend doing some research if you haven't, here is a 42 minute video I would suggest for starters:

On to step 3, effective personal social policy. If at any point you see an individual / company that is manipulating the system, or they are using business practices that you morally object to (such as laborers in poor working conditions, not paying a living wage, predatory business practices) you can always boycott the business and/or raise social awareness to the problems. Government force isn't needed to solve all issues and these solutions can work with a morally outstanding society, which is what I think we are both working towards.