Harry Truman's 90%

The government grows the private and public sectors. Many here will hate reading that. But whatever.

Truman wanted economic growth. I am not advocating for 90% on the top bracket.

I am saying in a great depression to grow the economy will necessitate very high taxes on the top bracket. There are reasons Ike’s 1950s seemed like quiet sailing. While Ike lowered the rate to 70% on the top bracket those tax receipts were necessary.

The 1950s are seen as after the Great Depression but that is not so simple. There is no cutoff. There is a need for policy decisions possibly lost on us 70 years later.

There is no guarantee that low taxes on the wealthy as we currently have will allow us any GDP growth.

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David Graeber, who is too political to post here, has said that when tax rates on the wealthy and corporations were high in the 1950s corporations said might as well give money to the employees to avoid taxes and invest in productivity. Meaning R&D was at its highest because it was written off.

When taxes are low on the wealthy predatory financial practices like rents are sought by the wealthy at the expense of growth in the economy.

In Europe total tax rate is close to double ours. Executives there are often rewarded with perks such as first class travel and staying in first class hotels. Those expenses are deductible business expenses. Bonuses or raises mostly go to the taxman.

Clever people figure out how to maneuver around the rules. A reward for getting the job done. Not for the benefit of others.

40% higher, not 100% higher.

Total US tax revenue equaled 24 percent of gross domestic product, well below the 34 percent weighted average for other OECD countries.

But if you factor in healthcare, guaranteed minimum pensions, unemployment insurance costs it’s probably pretty similar.

Unsure if US state-level taxes are included in that total.


Europe at this point is squandering capital. We are a long way off from that in the US.

Your numbers are probably better than mine. I worked for several European multinational and am retired from Rhodia, now owned by Solvay.

European countries have a much more robust social safety net. Universal health care and life time employment once you get a full time job. These programs are funded by higher taxes. I had heard close to 50% of income in Europe vs 30% in the U S.


Those are rough numbers. It is not simple to quantify because it is proportions across differing incomes. The 30% in the US in reality is much higher than the 50% in western Europe because education, healthcare, and retirements are handled so poorly in the US. Only 10% or so of households in that light are above water in the US.

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Depends on the country, depends on how you make money. There are places in the US where you are taxed on housing, and places in Europe where you more or less aren’t. In the US you get taxed on investing in shares; there are places in Europe where you aren’t. Tax on income depends significantly on whether you’re a worker, a business owner etc. The fairest comparison is overall tax burden as a total of GDP.

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Part of the difference is ideology. In Shiny-land, ideology dictates low taxes, and everything be rationed by ability to pay. Remember the drumbeat in the 80s for “user fees”? In some other countries, things are rationed by need: if you need education for 6 spawn, you get it. If you need a heart valve replaced, you get it. And neither education or health care will send you into bankruptcy. Haven’t I read the most common cause of personal bankruptcy in the US is medical bills? At the pump seal company I had worked at, a guy developed cancer, but had to keep coming into work every day, until only a few days before he died, because, if he didn’t keep working, he would lose his medical insurance and his wife would be stuck with a massive debt for his treatment. How many people land in bankruptcy, in part, due to the load of student loan debt they carry, even though the student loan itself cannot be discharged?

Even the tax burden as a percent of GDP is debatable, because people will always argue about how the burden is distributed. Ideology in Shiny-land dictates that the “JCs” should get a free ride, while the other 90% pays for everything. Remember Warren Buffet pointing out his secretary pays a higher marginal tax rate than he does?

If the government is to subsidize anything, ideology dictates the subsidies go to the “JCs”, while the other 90% get a lecture on “personal responsibility”. It has become laffable how companies will refuse to make investments that they should make in their normal course of business, unless they receive a government subsidy, effectively making their employees hostages to the willingness of government to give the “JCs” another handout.



steve203: sure, but I’m not arguing about ‘why the US looks as it does’; my original point was just that EU taxes aren’t 100% higher than US taxes.

As for “ideology dictates low taxes”, well, it might be more accurate to say “ideology dictates low benefits and claims of low taxes”. US taxes aren’t that low - depending on your situation - (and we’re all stock investors here I believe, that’s the relevant situation).

If I lived in the US currently I would be paying far more tax than either a) where I am now b) any of the 3-4 places I’ve been looking at moving to next, none of which is a tax haven.

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