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0 pointssgjohnson3y ago0 comments

But nobody ever paid it as there were millions of loopholes.

0 comments

You have to be actually wealthy for most "loopholes" come into play. Just like today, non-wealthy high earners take the biggest hit in taxes. And there are way more of those than actually wealthy people. Back then, the hit was even bigger, but the group being hit the hardest was smaller.

Politically, this setup seems to help keep those high-earners voting for lower taxes, which makes sense to them since they're the ones paying the highest overall rate.

flomo3y ago

Employee benefits like company-provided cars were way more common as it was a more favorable tax situation.

refurb3y ago

You did have to be wealthy, but $100,000 in 1980 is equivalent to $383,000 today which is pretty wealthy. So it’s basically income above $400,000 today.

And many of the tax “loopholes” involved real estate investment which would be accessible at that income level.

jliptzin3y ago

$380k is not wealthy. Most people can live just fine on $380k, don’t get me wrong, but it is basically upper middle class. If $380k/yr is wealthy then what is $20 million/yr?

5 more replies

UncleMeat3y ago

Up thread somebody asked what these were. A response had credit card interest deductions (rich people aren't running a credit card debt today, and certainly not in 1970) and easier tax fraud.

This is such a compelling narrative for the "taxes should be lower" crowd that I'm skeptical. Granted, this is my personal bias. But I would love to see the actual clear examples of how people are deducting like 50% of their income or whatever they'd need to bring their 70% marginal rate down to 35%.

brewdad3y ago

In the 80s mortgage rates hit 20%. So there's a start. Wages weren't quite as skewed to the high end as they are today. The gap between low middle, middle, and upper middle was not as wide, so it was less likely to hit the threshold for the 70% bracket. There were far more single income families, so again, not as likely to hit the threshold. Finally it's a marginal rate. Only income above the threshold would be taxed that much, not one's entire income.

thnujmikkkk3y ago

source?

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