Re:Yield of 0% a First at 3-Month Treasury-Bill Sale
by opo on Wednesday October 07, 2015 @01:02AM
(#10344263)
>...How about raising taxes for once? The US got out of its last major debt (ie: World War 2) by raising taxes on the highest bracket to 91%, and holding it there from 1940s through 1964.
This is misleading. The effective tax rates were roughly the same then as now - very, very few people paid those high rates. Instead a lot of effort went into hiding income, getting tax deductions made into law, getting compensation in forms other than taxable income, etc . (For example, this is why employer paid for health insurance came about.) There were people who weren't able to avoid the high rates, but it was a tiny percentage of revenue. These high rates distorted economic activity (and surely stopped some economic activity that would have happened).
The reason the US got out of WW II debt is that federal spending dropped dramatically after WW II and the US had the advantage of being the major industrialized country that wasn't attacked in WW II.
This is misleading. The effective tax rates were roughly the same then as now - very, very few people paid those high rates. Instead a lot of effort went into hiding income, getting tax deductions made into law, getting compensation in forms other than taxable income, etc . (For example, this is why employer paid for health insurance came about.) There were people who weren't able to avoid the high rates, but it was a tiny percentage of revenue. These high rates distorted economic activity (and surely stopped some economic activity that would have happened).
The reason the US got out of WW II debt is that federal spending dropped dramatically after WW II and the US had the advantage of being the major industrialized country that wasn't attacked in WW II.
An intro to the topic: http://www.manhattan-institute.org/html/ib_19.htm#.VhShIIShb...