History of the Progressive Tax Structure

[ebacon]

Good stuff.

My understanding of the history and benefit of the progressive rate tax is that it provides a disincentive to make ludicrous amounts of money off of the labor of others and/or by benefit of machine. It basicly helps create jobs and stabilize the economy by allowing the marketplace to divide itself into smaller pieces of pie.

After a man made his few million for the year the progressive tax kicked in and curbed his motivation so that another motivated man could also get his few million.

Exactly how much money was considered enough was haggled over by the legislature and adjusted annually by finagling the tax tiers and associated rates.

The way I see it it would be better to have a thousand millionaires than one billionaire.

On the other hand I can see where voters might have been fed up in the late 1970s and finally got rid of the progressive tax for all practical purposes. Looking at the tax schedule history it did reach down to the upper middle class during the last years. I suspect the feds wanted money to pay for the military and the voting majority was all warred out after Vietnam and stories of hundred dollar hammers made by crony capitalists.

Is that a fair summary of what happened? I'm hoping for a reply from those that were middle aged at the time. I was barely of voting age and just got hooked on Ronald Reagan's cowboy persona.