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Ike Wanted to Spread Wealth, Too
The wealthy of the Eisenhower years paid a hefty share of their income in taxes.
Nearly 50 years ago, a famous American gave a speech that advocated spreading the wealth.
In some countries, this notable stated, “a few families are fabulously wealthy, contribute far less than they should in taxes, and are indifferent to the poverty of the great masses of the people.” “A country in this situation,” he went on, “is fraught with continual instability.”
Just who made this spread-the-wealth declaration against the dangers societies invite when they let wealth concentrate? The then-president of the United States, Dwight D. Eisenhower.
Ike’s words back in 1960 created no controversy. Americans overwhelmingly shared his spread-the-wealth convictions. Societies that discourage vast accumulations of private wealth, they believed, simply work better.
The U.S. tax code, back then, reflected this consensus. Income more than $400,000 a year — that’s a bit more than $3 million today, after adjusting for inflation — faced a 91 percent tax rate.
The rich of Ike’s day, of course, exploited tax loopholes, just like today’s rich. But even after exploiting loopholes, the wealthy of the Eisenhower years still paid a hefty share of their income in taxes.
In 1955, for instance, America’s 400 highest-income taxpayers averaged about $12 million in income, in today’s dollars. They paid, after loopholes, 51.2 percent of that in tax.
Let’s put these numbers in contemporary perspective. In 2005, our 400 richest taxpayers averaged $214 million and paid federal taxes on that princely sum, after exploiting loopholes, at a mere 18.5 percent rate.
In other words, today’s rich are taking home much more in income than Ike’s rich and paying taxes at a much lower rate.
But here’s the amazing part. Our Republican presidential candidate, Sen. John McCain, sees nothing wrong. Any move to raise taxes on the rich, he tells us, would amount to “redistributing money instead of spreading opportunity.” Eisenhower, a Republican himself, would be aghast. Ike would see in our current financial meltdown proof positive that wealth, if left to concentrate, will bring on an “instability” that can endanger an entire nation.
Ike, were he around today, might even chide the target of McCain’s anti-redistributionist fury, Sen. Barack Obama, for taking too timid a tax-the-rich stance. Obama wants to raise the tax rate on America’s highest income bracket from 35 to 39.6 percent.
In the generation before Ronald Reagan’s 1980 election, Ike might point out, America’s top tax rate on the rich never dropped below 70 percent. The rich grumbled, but they survived.
Average Americans, in the meantime, didn’t just survive those tax-the-rich years. They prospered. In the quarter-century right after World War II, America’s typical family income more than doubled, and that’s after taking inflation into account.
Over the last quarter-century, by contrast, average Americans have progressed nowhere fast. Wages today, after inflation, are actually running less than wages in the early 1970s.
What’s the big difference between the years right after World War II and the last quarter-century? In the first era, we encouraged the spreading of wealth. In the second, we’ve let wealth concentrate.
Ike wouldn’t be happy. We shouldn’t be either.
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Show All"Ike, were he around today, might even chide the target of McCain’s anti-redistributionist fury, Sen. Barack Obama, for taking too timid a tax-the-rich stance. Obama wants to raise the tax rate on America’s highest income bracket from 35 to 39.6 percent."
That statement, I think, reveals our current political situation in a nutshell. We are about to elect a Dem who is to the right of a '50's Rep. Those progressives out there who argue Obama has the "potential" to be progressive when he doesn't even suggest getting close to the policies of a 50's Rep. admin. obviously don't know what a "progressive" is. If it weren't such a bad sign of how anemic their efforts will be to "push" him in the right (as opposed to further right) direction, it would be merely quite sad. But maybe, if they try really hard, they can get him within a moon's distance .....
That's why Obama didn't bother to bring Eisenhower up and hit back at Mccain like that.
It doesn't matter how far to the left he is deep down in his heart, Aquifer, or even in the proclamations and exhortations he sets forth in his inaugural address, for that matter. What matters is the extent to which he can LEAD the congress in the direction which you and most of the commentators on this site (and that includes yours truly) would have this country go. But before he's even in a position to do that in order to lead candidate OBAMA had to persuade, cajole, martial, manipulate, pledge, promise -- whatever it takes -- so that the electorate would entrust that bully pulpit (and those considerable executive powers) to him for an initial term of four years, and then one more perhaps. If his initial term runs into the kinds of land mines that Bill Clinton's did (gays in the military / Whitewater / "Hillary does healthcare") the forward momentum could be reduced substantially. But the good new is, Obama will have large majorities in Congress and a clear mandate from the voters.) All that is needed is the kind of movement among the populace that will "force" him toward the kind of progressive movement which is described in the books AUDACITY OF HOPE and DREAMS FROM MY FATHER. The time to push in now, Aquifer, and "they" (we) will need your help and support.
I can almost hear a collective sigh of relief that we're rid of Bush.
I'll take what I can get and keep pushing for more.
I agree.
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I think, therefore I am dangerous.
"...our current political situation in a nutshell. We are about to elect a Dem who is to the right of a '50's Rep."
And so much for conservatives being the advocates of tradition and a return to the good old days, heh?
Over these past few decades I have been simply flabbergast by the shift away from a concern and focus for the "common good." The problem is that way too many equate "common good " with communism and socialism, which is more a problem with language than any actual ideology or its practices.
It should be common sense how the common good is in the best interest of just about everyone except exceedingly self-obsessed self-aggrandizing wealth mongers. The problem with "common sense" however is that it has largely become equated with the ways and interests of common folk. And well, you know, as Americans we are uncommonly good, or we are nothing at all.
But the biggest problem with negative rhetoric about redistributing wealth coming from republicans is that they themselves have been responsible for the greatest redistributions of all - from the poor to the rich, from essential infrastructure to the military and big corporations, from equitable balanced budgets for today toward unbridled runaway indebtedness for tomorrow, from serving the common good to rewarding uncommon greed. And most amazing of all is that they (the republicans) actually believe this has been for the best. It's simply insane, and that doesn't even begin to say it strongly enough.
If Teddy Roosevelt, Ike or Tricky Dick tried to run for president today they would be considered way too leftist and marginalized the way Kucinich, Nader and McKinney have been.
Things this article didn't point out:
There was at least one US financial crisis in each decade from 1800 to 1933.
From the start of FDRs New Deal in 1933 until 1987 (during Raygun's second term)the US experieeced NO financial crisis. (Note: At least one US recession has occurred in every decade since 1776, as recessions are a natural part of a capitalist business cycle). Since 1987 the US has experienced a series of financial crisis caused by deregulation and regressive taxation.
Corporations paid 29% of US income tax in 1970. Today they pay 6% and within a decade they will pay 0%. Until corporations are paying 29% or more of US income
taxes the working class will continue to lose ground.
Ike was the last republican who gave a damn about the American citizen. Ever since then, they have been the party of big money and nothing else.
Ike warned us about the very people that have stolen our freedom and our treasury, the Military/Industrial complex. That was HIS term for them, and he taught us all about them. But those in the generation before mine (I'm 50) ignored his warnings, and let those who had money in the fear game win. And they have done so with a vengance.
God can only guess at what Ike would have said and done about Cheney had they lived at the same time. I suspect that charges would be filed, and Cheney would have done time. He still should. And I hope that he does.
Ike was the last GOOD republican. He never trusted Nixon, what does that tell you?
Maybe it is the romantic in me, but I like to believe that Ike would have had Cheney executed.
Ike didn't particularly like his vice president Tricky Dick either. I guess that's one thing McCain does have in common with Ike.
Funny how Ike has had a resurgence. The media were fond of taking swipes at Ike for his fondness for golf, implying he spent too little time being President. But what we have seen looking back is that he made good decisions and had the instincts and values of ordinary folks because he was one of them. Maybe it was qualities developed as commander of the allied armies on the western front in WWII that made him decisive and pretty wise at the same time. Recall the way he dealt with Little Rock, the Israeli-French-English takeover of the Suez Canal, and staying out of a hot war with the Soviet Union. Even staying out of Hungary, where he was judged as letting the Hungarians hang out to dry, probably saved thousands, perhaps millions of lives. Of course, some decisions were not the right ones, but Ike stands pretty high among Presidents in many ways. Certainly not his public speaking, which was pretty poor unless you listened to the words.
His comments about wealth are pretty much what we could expect.
The income tax was originally designed to be a tax on the rich. Before 1913, there was no income tax. In 1918, during WW I, some 85 percent of American households paid no income tax at all, and almost 80 percent of federal income tax revenue came from the top one-half of one-percent of households.
It was JFK that effectively pushed to cut the taxes for the wealthy and raise the taxes for the middle class. However, JFK at the time recognized the dangers of globalization, and the transfer of wealth from the US by the wealthy to other countries with a lower tax burden and also having labour earning much less than American workers. In order to prevent this, he had to offer something in return.
He also wanted to eliminate the tax incentives to move production overseas. Incentives included not having to pay any taxes on corporate income unless the money earned overseas is sent back to the US. He also wanted to eliminate the tax havens. Both still exist today.
He also wanted to tax capital flight at 15%. That is capital being exported overseas to set up factories and export American jobs. He was assassinated before he could get it through, and LBJ corrupted it so that capital flight through Canada would not be taxed. So today capital flight and profit by American corporations overseas is untaxed, and the wealthy hide their income in tax havens and pay little tax, and of course, the effective tax rate on what is earned in the US is much less.
Then there's the corporate income tax, which back in the 1920s yielded almost a third of federal revenues. Today corporations pay just a little over one-ninth. 72% of foreign corporations in the US and 57% of US companies pay no taxes. Twenty five percent of the largest U.S. companies paid no federal income taxes in 2005 despite $1.1 trillion in gross sales that year.
Yeah, I really feel bad for the burden the rich and large corporations bear. They are the biggest beneficiaries of government services, why shoudn't they pay more for it. And they should own the biggest part of the national debt as well.
Nice synopsis - well put! If only the 'tax and spend' naysayers could think and appreciate such clarity.
Unfortunately, this still doesn't address the unconstitutionality of the income tax in the first place, or the fact that the income tax exists primarily to service debt to the Fed.
Interesting how there are many posters who can praise Ike overall, while simultaneously admitting he didn't make all the right decisions all the time. It's his legacy that people remember...
...Wonder what folks will say characterized Obama's presidency in 50 years. How will they describe his legacy?
Will it be:
He wasn't liberal enough... he didn't raise taxes enough... he only supported civil unions instead of gay marriage... he didn't get his new puppy from the Humane Society... etc etc
Or:
He inspired a nation... first black president... presided over a massive financial crisis we got through... he got us out of two wars... forged new alliances and repaired old ones... made health care universal... worked with all parties... etc etc
Some are worshiping him, some are already berating him, both groups with nothing more to go on than a short Senate term, a couple of books, a great smile, and an awesome campaign.
Just saying, no president has EVER been perfect, have they? Let's try not to get excited or upset about things we don't have evidence about, yet.
Roosevelt and even Hoover said the same thing in 1932, essentially agreeing with Huey Long. I've been complaining about the over concentration of wealth, mainly that of corporate executives, for almost twenty years. Few cared until recently. Don't get your hopes up for any significant change. Taxing income is only part of the solution. Accumulated wealth above some limit should be taxed as well.