TOP RATES…. Chris Hayes raised a good point this morning that bears repeating: “I would very much like to see the U.S. return to the average top marginal tax rates of the Reagan administration.” He added, “Do Republicans believe the top marginal rates under Reagan were ‘job killing’?”
This is relevant, of course, in light of the debate over tax rates in Washington. President Obama wants to keep lower rates for the middle class; Republicans are fighting to protect lower rates for the wealthiest Americans. Under Obama’s vision, the top marginal tax rate would return to 39.6% — where it was under Clinton, and where it would return based on the expiration date adopted by George W. Bush and congressional Republicans.
At this point, the GOP considers a 39.6% top rate, applied only to the top 2% of wage earners, as somehow confiscatory and dangerous. So, to Chris’ point, let’s add a visual element to the discussion.
John Cole posted this graph early last year, and it’s still helpful. See that column on the far-right edge? That’s where Obama proposes the marginal top-rate should be. Indeed, that’s exactly where the rate would be, effective January 1, 2011, based on the tax policy adopted Republicans several years ago.
(If you’re having trouble seeing the chart, MoveOn republished it in an easier-to-read version.)
A 39.6% top rate isn’t outrageous. It’s not socialism. It’s lower than the top rate for most of Reagan’s presidency, lower than Nixon’s top rate, lower than Eisenhower’s top rate, and lower than FDR’s top rate when he pulled us out of the Great Depression.
There’s really no reason for Republicans to hyperventilate here.