Reply #55: A quick maximum wage history [View All]

The notion of a "maximum wage" actually has roots deep in American history.

The maximum wage idea appears to have first surfaced with Felix Adler, the social philosopher who founded the Ethical Culture movement. Back in 1880, amid America's first Gilded Age, Adler proposed a top marginal income tax rate of 100 percent, in effect an income cap.

World War I would see a broad citizen's campaign for just such a cap, led by Amos Pinchot, an attorney whose brother Gifford helped establish conservationism in the United States. Pinchot's group called for a 100 percent tax on all income over $100,000. Maverick publisher E. W. Scripps, founder of what would become the Scripps-Howard newspaper chain, urged a 100 percent tax on all income over $50,000.

During World War II, President Franklin D. Roosevelt picked up where Scripps left off. In 1942, FDR called for a 100 percent tax on all individual income over $25,000, about $315,000 or so in today's dollars. Congress didn't buy FDR's cap, but lawmakers did go on to set the top marginal rate at 94 percent on income over $200,000, and that top rate would hover around 90 percent until 1964, years that would see the greatest period of middle class prosperity in U.S. history.

These days, maximum wage advocates are talking about income caps as multiples of income minimums. One step in this direction would be passage of Rep. Martin Sabo's Income Equity Act, legislation that would prevent corporations from deducting off their taxes any executive compensation that runs over 25 times the pay of a company's lowest-paid worker.

The full text of a recent book that discusses all this is now available to read free online through the Apex Press, a nonprofit New York publisher. Check www.greedandgood.org.