Tom Brokaw wrote a book chronicling the character of “The Greatest Generation” of Americans. That was the generation of our fathers or grandfathers – depending on our age. They were not self-absorbed people who put their own interests in front of society’s, regardless of the cost. Just the opposite, they realized that their own prosperity (and freedom) was also intertwined with the prosperity and freedom of the rest of society. This strength of character was not limited to one group of citizens either, it was equally shared between the haves and the have-nots.
In 1932, in the middle of the Great Depression, when the country and many of its citizens were in unprecedented distress, the top tax bracket rose from 25% to 63%. In 1940, when the country joined the struggle in World War II and the country had to ration and struggle to support the war effort, it rose to 81.1%. And in 1944 when the country began to emerge from WWII and attempt to get its economy back on track, it again rose to 94% and the lowest tax bracket rose to 23% from only 4.4% just three years prior.
The rate fluctuated to a 70% top tax bracket when President Carter left office. It dropped from 70% to 28% during the Regan Administration alone, but eventually rose to 39.6% under Bill Clinton during the 90’s – arguably the best economic times this country has enjoyed in almost a century. The stock market and the housing market were booming and unemployment was at an all time low.
When George W. Bush took office and began lowering the top tax bracket from 39.6% to 35% he also lowered the Capital Gains tax from 20% to 10% - another tax break exclusively for those who could afford to make investments rather than simply struggle to pay the bills. He also shifted many federal funded programs to the state level - which devastated state budgets across the country. These shortfalls were passed on to municipalities via shrinking state funded financial assistance. The result of these shrinking funds on the municipal level was inevitably passed on to the property holders in the form of higher real estate and property taxes.
The Bush tax breaks to the very rich were intended (so he claimed and Republicans continue to claim) to stimulate businesses and investors to create jobs thereby helping the lower and middle income families. Has that happened? Since the Bush tax breaks have been in place the level of unemployment has risen to historic highs. Not since the Great Depression has America’s lower and middle income families been in such dire financial shape. Maybe it’s time to raise the top tax bracket in the USA back to 63% to get us out of this Depression.
The Greatest Generation stepped up and showed their true integrity and character when things looked bleakest. Our present generation is setting an example for our kids and grandkids just as our parents and grandparents did for us. What are we showing them? We’re teaching them that if governmental promises and contracts are placing too much of a burden on us we can simply ignore them and walk away.
I don’t think we’ll have any books praising our generation any time soon!