My rant on why progressives are good for your wealth and freedom !

90+% top marginal tax rate above $400,000.00 in the 50's?

People who bring up the 90% tax rates in the 1950s as an equal comparison to today don't understand economics.

It does make me laugh however to hear Marxists state how we had 90% tax rates in the 1950s and we did just fine.
 
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The thing is not that tax rates should be 90% - it is the idea that cutting them is not effective. If it was the Bush tax cuts would have produced a 20 year boom. If business is depressed small business is already paying lower taxes because they are earning less profit. If you are Joe the Plumber and you work an average of 4 hours a day because the economy has contracted - you don't need a tax cut, you, like any small business, need customers. The Tea party solution seems to be cutting entitlements and redistribution when most recipients of this money don't buy bonds or oil futures - they patronize small business. Cut social security and you cut the income of small business directly. You also cut it indirectly because fear of not having social security will cause the 40 somethings to stash money in the bank - and not spend it at small business. The same applies to unemployment checks and other "big government" transfers - most of that money goes to small business.

Much of the income of the middle class goes to small business and this income is decreasing due to the devaluation of labor. Cutting social security and entitlements like the right wants means people work longer, more man hours are available, and supply and demand then mean that those hours are worth less. If there is no safety net - like unemployment insurance - employees are less secure and less able to negotiate better compensation. That reduces their income and the income of small business.

Taxing the rich and giving to the poor is good for those job creating small businesses. The rich still own the means of production so the money comes right back - it is as if they lent it to the greater society and got it back with interest. The increase in the volume and velocity of circulating money creates economic growth and that benefits everybody. Taxing the rich to provide generous unemployment benefits and welfare create a breaking effect against a deflationary spiral. It is obvious that if you have the option of being lazy and staying home they have to pay you more to get you to work. You then have more to spend, you create demand, they have to pay other people more to work to service that demand. That causes a combination of inflation and growth that allows people to make mortgage payments so the banks don't fail. ect ....
 

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