Let’s Party like it’s 1955

Let’s try something shall we. Let’s take the 1955 tax tables, update them for inflation, and compare the taxes paid for various taxable incomes between the inflation adjusted 1955 tax tables and the 2010 tax tables. In other words, compare what you would be paying in taxes under the 1955 tax structure to what you would be paying under the 2010 tax structure.

I chose 1955 because that seems to be the year that Conservatives would like to roll us back to.

For comparison I arbitrarily chose six taxable income levels, $25,000, $50,000, $100,000, $250,000, $1,000,000 and $10,000,000. The comparisons are shown in the chart.

There are two things about this chart that should strike you. The first is that EVERYBODY would pay a hell of a lot less taxes under the 2010 tax structure than the 1955 tax structure. The idea that taxes have been going up is a myth. The problem is that INCOME has not gone up by much except for the very rich.

The second thing that should strike you is that the folks that have gotten the most benefit from the changes in tax policy of the past 55 years have been the ultra-rich and the people that have gotten the least benefit are the folks in the middle.

Now, let me make this perfectly clear, the richest people, the ones who are supposed to be paying the most taxes in a progressive tax structure, are paying a hell of a lot less taxes, relatively speaking, than they were in 1955. They’re still paying more absolute taxes than everyone else but their relative tax burden has been greatly reduced. For every $1 of taxes they would be paying under the 1955 tax structure, they're only paying $0.40 under the 2010 tax structure.

You think 1955 is a bad choice? OK, let’s go to 1981, the year just before the first Reagan tax cut and compare. Again, I will adjust the 1981 tax tables for inflation and this is what you get.

This is even worse. The folks at the poverty level are paying MORE of their income in taxes while the ultra-rich are paying about half of what they would have paid under the 1981 tax structure. If this doesn’t get you bent out of shape, you have serious issues.

Please don’t take my word for this. The historical tax tables and Inflation Calculators are available on the web and the arithmetic involved is modest . Anyone with Excel can easily verify my numbers.