Reagan's Mean-Spirited Legacy of Economic Disaster

http://www.beyondchron.org/news/index.php?itemid=8864

The so-called "Reagan miracle" is a complete and utter myth, as one can see from these simple comparisons of basic economic growth statistics. As one can readily see, the 1970s were a troubled decade compared to the 1960s, but we still managed to keep reducting our debt-to-GDP ratio. Then Reagan came along, and gave us a junk-food "cure" that was only marginally better in terms of GDP growth and income growth for the bottom 99%, was actually worse in terms of job creation, and showered the top 1% with wealth--at the very time that their taxes were being slashed as never before:



In April 1942, just a few months after Pearl Harbor, Roosevelt asked Congress to enact a 100 percent top federal income tax rate, in effect a "maximum wage." No individual, FDR told lawmakers, should be taking home, after taxes, over $25,000 - the equivalent of about $335,000 today.

Not until 1964 did that top rate start dipping, down to 70 percent. In 1981, the newly elected President Ronald Reagan would make gutting that 70 percent rate his first major White House priority. By 1986, after two Reagan tax cuts, the top rate on the top income bracket had shrunk to a mere 28 percent.

In the middle decades of the 20th century, the steeply graduated progressive income tax that actor Ronald Reagan so detested operated marvelously well as just that sort of check. America's super rich - our top tenth of 1 percent - saw their share of the nation's income drop precipitously in those years, from nearly 12 percent before the Great Depression to under 3 percent by the 1970s. The top 0.1 percent share in 2007, right before the Great Recession? Over 12 percent. The rich, in other words, have come all the way back - and more.