Michael Hudson: History of US shows economy grows when top tier tax rates and workers wages are high.
Michael Hudson is President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City and author of Super-Imperialism: The Economic Strategy of American Empire (1968 & 2003), Trade, Development and Foreign Debt (1992 & 2009) and of The Myth of Aid (1971). ISLET engages in research regarding domestic and international finance, national income and balance-sheet accounting with regard to real estate, and the economic history of the ancient Near East. Michael acts as an economic advisor to governments worldwide including Iceland, Latvia and China on finance and tax law.
JAY: So we’ve been having conversations. And let’s pick up on the issue of taxes. Now, during the Eisenhower years, the marginal tax rate at the highest level was 90 percent. Give us a little bit of the history, because that seems an astounding number compared to the debate that’s going on today. How did we get to that 90 percent? And then what happened?
HUDSON: But you got to that 90 percent right with the first income tax law that was passed in 1913. Under the original income tax law, only 1 percent of Americans had to file income tax returns, and you had to make the equivalent of about $120,000 in today’s dollars even to be liable to file. The idea of the income tax was to get what the classical economists called unearned income. Most people who made over $100,000 at that time got it from rent or interest, or the financial sector or the real estate sector.
Michael Hudson: Higher Taxes on Top 1% Equals Higher Productivity
from the archives:
- Michael Hudson: Why Government is More Afraid of Debt than Depression (dandelionsalad.wordpress.com)
- Democracy Now! with Michael Hudson: Financial Warfare (dandelionsalad.wordpress.com)
- Keiser Report: Ellen Brown on Deficit Easing (dandelionsalad.wordpress.com)