Please Raise My Taxes

Because I can’t believe the politicians or the bloggers, I went to have a look at taxes. Lately, I have heard that taxes are too high, that we cannot raise the taxes on the highest earners – I am told this will be disastrous.

I consider myself to be a patriotic American – as patriotic as the next guy – so I need to know how this works. Admittedly, I have given this some thought in the past, but it is right out there now, given the state of the economy.

Naturally, my first question had to do with the Great Depression. What was the tax burden to the wealthy during the depression? I think that is a good question, because someone surely paid taxes even though unemployment rates during those years rose to astronomical heights – 24.9% in 1933 (http://www.huppi.com/kangaroo/Timeline.htm and others). At a time when our country was losing jobs at an alarming rate, the nation asked for swift action from its leaders in Washington – and that required, at the very least, some revenue.

So, I need to understand historical tax rates. I did find a table that shows the top marginal tax rates from 1913 through 2003. In 1931, before Roosevelt (and the first stirrings of action from then President Hoover) the top marginal tax rate was 25% against income greater than $100,000. In 1932, with Hoover still in office, the rate was 63% against an income of 1 million dollars. The lowest rate was 4% (http://www.irs.gov/pub/irs-soi/02inpetr.pdf). By the end of the Great Depression and right up until World War 2, the rate continued to rise, until the government was collecting as much as 81.1% against income of 5,000,000!

Understandably, this new approach to taxation was met with some extreme resistance from certain quarters. In 1933, a group of very wealthy and prominent businessmen conspired to overthrow Roosevelt’s newly formed government (http://www.huppi.com/kangaroo/Coup.htm ). Apparently, there was a little bit of doubt that Roosevelt new what he was doing.

I think it is probably obvious that taxes, alone, did not really power the recovery. Roosevelt had been blessed with a Democratic congress that was anxious to respond to their new leader. In the first year of his administration, Roosevelt moved to reform the banking industry while introducing programs designed to put people to work – the Civilian Conservation Corps, the Tennessee Valley Authority, and the Public Works Administration, most notably. All of these projects had the added advantage of contributing to the infrastructure of a very large nation that was beginning to grow into its border with the advent of the airplane and widespread automobile ownership. During this time, many new roads were constructed, our national park system was developed with trails, campgrounds, roads, and fire towers, dams were constructed to supply water and hydroelectric plants, and the beginnings of the “grid” of transmission towers and power lines were put into place.

Naturally, employment began to rise very soon after these programs were actually underway. By 1934, the GNP and employment began a continual rise until 1937, when, under pressure from economists, Roosevelt moved to balance the budget and the nation entered a “mini-depression” as unemployment rose from 14.3% to 19%. By this time, I suppose that could be seen as an adjustment rather than anything precipitous, since no New Deal legislation was passed in 1937 and the economy came around and resumed its rise.

Most of the critics of Roosevelt’s programs labeled them socialist, but by the end, the players remained the same. The moneyed families from before the depression were, by and large, the moneyed families afterward – and those same families are still among us (Morgan, DuPont, etc.). What emerged was a middle class that helped the wealthy to refill their coffers, which fueled more growth, more jobs, and more middle class Americans.


Then came World War 2.

In times of need, we expect to pay more, so there wasn’t much of a fuss raised as tax rates skyrocketed to 88% against just 200,000 dollars in income. By the end of the war, that rate would actually rise to 94% against $200,000 – that means the government was only letting you keep $12,000 of every $200,000 you earned!


The tax table clearly shows that taxes remained high right up until 1986 – but they steadily went down. In 1986, the whole game changed, but let’s take a look at those years between WW2 and 1986.

President Eisenhower asked the nation to embark on a mission to build the Interstate Highway System. This was seen as a boon for commerce and travel, vital to the growth of the nation as the population began to shift to the West. California was quickly becoming a major source of fresh produce and dairy products. The entire southwest U.S. was home to a boat-load of cattle, sheep, poultry – and the markets were all over the country. Eisenhower also updated the rails, strengthening the railroads, and he continued many of the projects that would supply our electricity for decades to come: the Tennessee Valley Authority, most notably.

Under John Kennedy, we began our voyage to the moon, and we began to address many of the problems that were beginning to turn our inner cities into slums and war-zones. Kennedy also brought us the Peace Corps – an organization that tries to bring some of our advantages to other nations (and sows the seed of democracy worldwide).

President Johnson continued many of those social programs, expanding them into The Great Society, but his administration was crippled by growing involvement in Vietnam and civil unrest in America – with the black civil rights movement and the anti-war protests.

Ask me where our tax dollars were going during the Seventies and early Eighties, and I can’t see any evidence of anything new, anything grand, any investment in the future of the nation.


1986.

Our top rate in 1985 was 50% against income of $175,500 or more. In 1986, it dropped to 38.5% against income over $90,000. By 2002, the rate was 38.6% against income over $307,050. In between, the rate fluctuated, but not by much.


So, here we are.

We are facing an economic crisis that has no comparison in history except to the Great Depression. In the past few years, we have seen disasters directly connected to a crumbling and unmanaged infrastructure – the tragedy of Hurricane Katrina and the failure of the I35 bridge across the Mississippi River in Minnesota. Our planet is under siege as we continue to see the effects of global warming on the polar ice caps and on seasonal weather patterns. Our money is increasingly going overseas as we buy more than three fourths of our petroleum from foreign sources.

How much is in the balance? Can we afford to wait and see?


Please raise my taxes.


In a few months, at the age of fifty, I will begin my next and my last career as an elementary school teacher. I will stand in front of about thirty young faces, sixty new eyes. When they look at me and ask me what the world will look like for them in 20 years, what can I tell them?

The time is here, folks. The highways don’t build themselves. The wealthy aren’t going to build dams and dikes. Large goals, things that look forward, cost money. Solar and wind farms don’t grow on their own.

But, vision built the country we enjoy. Vision is our strength. In ten years, we can eliminate all carbon-based fuels in this country. We can build a power grid for the next century. We can replace oil- and coil-burning power plants with solar, wind, and collection technologies we haven’t dreamed of yet. We can extend our reach into space, beyond our solar system and maybe learn more in the voyage about ourselves. We can find ways for people to be productive and feel good about themselves as we move increasingly into a world that requires human hands less and less – real jobs at realistic pay that allow all Americans a chance to reap the benefits of the best system in the world, peopled by the brightest people in the world.


Please raise my taxes.


Now we have this whole national debt beast. Are we even collecting enough in taxes this year to pay the interest due on the national debt? I can’t imagine we actually are.

Someone explain to me how raising taxes is a bad idea right now. Better yet, someone explain it to those thirty kids.