It’s an interesting paradox in a day when “socialism” has become a scare word: back in 1955, when Joe McCarthy, the Red Scare and blacklisting still hadn’t gone cold as news, the top 400 earners in America had to pay 51.2 percent of their income as tax.
That wasn’t considered communism or socialism. The government figured that anyone who made millions owed the rest of the country something, since even if he wasn’t getting direct help from the government, he was using public amenities like infrastructure more than the rest of us.
In those days, too, government policies, including tax policies, were shaped to fit the ordinary repatriated veteran, the kind of man who’d helped win World War II, and he was in most cases—though there were exceptions—not rich.
Between 1955 and 2007, according to a new study, wealthy Americans have seen their tax burden fall from that 51.2 percent to 16.6 percent, while the percentage of tax paid by the less well off has stayed the same or risen slightly.
In the year 2007 alone, if the top 0.1 percent of American taxpayers (whose incomes averaged $7,126,395) had all paid federal taxes at the rate that layer would have paid in 1960, the nation would have collected an additional $281.2 billion in revenue, according to the study.
And during the administration of Bush 43—from 2001 to 2008—the tax breaks cut for individuals making over $250,000 a year came to $700 billion, money the country has had to borrow at the expense of the middle class of the future, says this study, entitled Shifting Responsibility: How 50 Years of Tax Cuts Have Benefited America’s Wealthiest Taxpayers, by the economy-watching group Wealth for the Common Good.
A lead author of the study is Chuck Collins, founder of Wealth for the Common Good and co-author with Bill Gates, Sr. of Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes. Collins is an heir to the Oscar Mayer fortune but gave away the bulk of his share of it in 1985, and is now a senior scholar at the Institute for Policy Studies.
The report was released in April, not long after a Quinnipiac University poll that found that 60 percent of Americans, including Republicans as well as Democrats, favor raising income taxes on earnings above $250,000 to help drive down the nation’s deficit. And more than 70 percent of respondents, including 56 percent of Republicans polled, said people making more than $1 million a year should pay more income tax.
