Wednesday, October 28, 2009

We need to raise the marginal tax rate to 45%


The Tax Policy Center has a table showing the top marginal income tax rate.  In the 1950s it was as high as 91%.   In the 1950’s the economy was strong, GNP went from $284.6 billion 1950 to $482.7 billion by the end of the 1950's. In 1954, there were reported to be 154 millionaires in the U.S.  The high marginal tax rate didn’t keep people from becoming millionaires or the economy from booming.

Today the top marginal tax rate is 35%.  The House has proposed a 1% surtax on people with incomes over $500,00 to pay for health reform and up to 5.4% for people with incomes over $1 million. 

Makes sense but let's do more.  Let’s take the top marginal tax rate to 45%.  That’s less than half of what it was in the 1950’s boom years. We could cover the cost of Health Reform with money left over for other progressive programs to improve the country.  It's something worth considering.



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