Wow, your post sent me down quite a rabbit hole. I suspected 94% was rather high, this page puts it into clearer perspective:
The “exceedingly high” part of this question most likely refers to the federal income tax’s “confiscatory” top rates coming out of World War II, which the Eisenhower Administration left in place into the 1960s. During the war, the top “marginal rate” was 94%, but 94% of what? Then as now, income tax rates moved up at distinct break points. In this made-up example, consider a 15% rate up to $25,000, 21% from $25,000 to $50,000, and 25% over $50,000. Those making $50,001 or more won’t pay a quarter of their total income, but rather 15% of the first $25,000, 21% of the next $25,000, and 25% of everything above $50K. That’s why the system is called progressive - the percentage rate progresses upward with income, but the higher percentage applies only to new (marginal) income above each break point. In 1944-45, “the most progressive tax years in U.S. history,” the 94% rate applied to any income above $200,000 ($2.4 million in 2009 dollars, given inflation).
Very few individuals encountered this top rate, however. The actual proportion of earnings citizens paid as income taxes in 1945 was far lower: for the poorest 20% of Americans, 1.7%; for the next 20%, 6.2%; for the middle quintile, 8.9%, for the upper-middle 20%, 10%; and for the wealthiest quintile, 20.7%.
Still, your point stands, taxes can be an instrument for (more) equality. The article I referred to (see another reply of mine for the full article) also gives an example of how taxes can be fairer, and also gives an example of a time in Italy when they were.
Now if they added in a progressive tax rate for corporate taxes as well… Say anything over 500 million in net profit is taxed at a 90+% rate. That would solve all sorts of issues. Suddenly investors of all these mega corps would be pushing hard to divide up the companies into smaller entities.
Wealth tax in the modern age could be an inheritance tax. Anything over the median life earnings of individuals could be taxed at 100%. So median earnings in my area is $65K * 45 years (20-65k) = $2.93 million.
Wow, your post sent me down quite a rabbit hole. I suspected 94% was rather high, this page puts it into clearer perspective:
source
Still, your point stands, taxes can be an instrument for (more) equality. The article I referred to (see another reply of mine for the full article) also gives an example of how taxes can be fairer, and also gives an example of a time in Italy when they were.
In 2025 it would be anything above 3.6 million. It’s a ton of money but here’s a list of a few people that hit it.
https://aflcio.org/paywatch/highest-paid-ceos
Now if they added in a progressive tax rate for corporate taxes as well… Say anything over 500 million in net profit is taxed at a 90+% rate. That would solve all sorts of issues. Suddenly investors of all these mega corps would be pushing hard to divide up the companies into smaller entities.
Wealth tax in the modern age could be an inheritance tax. Anything over the median life earnings of individuals could be taxed at 100%. So median earnings in my area is $65K * 45 years (20-65k) = $2.93 million.