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WISDOM FROM THE ANNALS OF HISTORY
25 Years of Prosperity Following WW II;
How did that happen?
By S.C. Burns
Historian, Author
GREAT DEPRESSION AND
WORLD WAR II: FDR INCREASES DEFICIT
SPENDING AND INCREASES PERSONAL INCOME TAX RATES
History teaches us that this nation has survived
thus far because wealthy patriots were willing to pay for revolution and reform: 1) for the American Revolution, in its
entirety; 2) to provide loans to the federal government, before the Federal
Reserve was created in 1913 (J.P. Morgan was the lender); 3) paying increased taxes during World
War II, to assure democracy and capitalism survive, AND pull the economy out of depression; and finally, 4) to help pay for the war effort, without complaint. It
wasn’t merely production for World War II which pulled the United States
solidly out of the Great Depression.
FDR was given unprecedented powers under the first two War Powers Acts
(1941 and 1942) to set wages and prices, extend loans to existing defense
industry contractors, forbid union strikes, and fund round-the-clock production
for the war effort (three eight-hour shifts), building aircraft and ships.
Automaker Henry Ford dedicated his plant entirely to the production
of automobiles for the military. No new
automobiles were built for private consumption during the war. AND, by the end of World War II, the highest
tax rate for wealthy individuals was set at 94%. AND GUESS WHAT—WORLD WAR II WAS A POPULAR WAR AND AN EXTREMELY
PATRIOTIC ERA IN OUR COUNTRY’S HISTORY. U.S. CITIZENS WERE WILLING TO WORK AND
SACRIFICE, IN ORDER TO INSURE THAT CAPITALISM AND DEMOCRACY WOULD SURVIVE! WHAT HAS HAPPENED TO THAT SPIRIT?
THAT’S NOT THE END OF THAT STORY EITHER. The tax rates for the top tier wealthy
Americans remained at high levels for the 35 years following the end of the
war, helping to explain the post WW II period of prosperity (which also
produced the Baby Boom). In the 1950s,
the graduated tax table identified 25 different rates: the lowest rate was
17.4% for those who earned $0 to $4,000, and the highest individual income tax
was 84.357% for those who earned $400,000 - and over. In the
1960s, there were 24 tax brackets.
The lowest group paid 20% for those who earned from $0 to $4,000. The highest bracket was 91%, for those who
earned $400,000 or over. In the 1970s, there were again 25 tax brackets.
The lowest brackets was $0 to $1,000, and they paid 14%. The highest rate was 71.75% for those who
earned $200,000 and over. In 1980, there were 16 tax brackets. Those who earned $0 to $3,400 paid 0% in
taxes. Those who earned $3,400 to $5,500
paid 14%. Those who earned $215,400, and
over, paid 70% in taxes. THEN THE SO-CALLED REAGAN REVOLUTION BEGAN,
AND THE FIRST EXTENSIVE TAX CUT SINCE PRIOR TO WORLD WAR II OCCURRED.
READ THE REAL STORY OF THE “REAGAN REVOLUTION”
NEXT WEEK (the same man who offered amnesty to all illegal aliens who entered
this country before 1982). https://www.npr.org/templates/story/story.php?storyId=128303672
