Oh, Prosperity! Where is thy sting?

From 1954 through 1963 the top marginal income tax rate was 91%, the effective rate was about 87%. If the Republicans were right about all the horrible things that happen when you tax the “job creators,” the jobless rate should have gone through the roof and the economy should have spent the entire decade spinning in the toilet. But that did not happen. As the unemployment figures below seem to indicate, the ten years when those tax rates were in effect were prosperous years
1954 5.5%, 1956 4.1%, 1958 6.8%, 1960 5.5%, 1962 5.5%.

Notice the increase in the unemployment rate in 1958. What the Democrats called the Eisenhower recession took place during the years of 1958 and 1959. It should be noted that President Eisenhower did not respond to the recession by lowering the taxes of the wealthiest one percent of the population and the unemployment rate still dropped back down to 5.5.%. Today the wealthiest individuals pay a top marginal tax rate of 35% on earned income and 15% on capital gains. If taxes on the so called job creators are determinative we should have full employment right now. It is difficult to believe that anyone still thinks the rich cannot afford to pay the same tax rate they paid when Bill Clinton was President or that raising the top marginal rate to the level it was under Clinton will somehow stifle the growth of our economy.

Good news is bad news if you are a Republican. They are crying over the report showing the jobless rate dropping below 8%. They are acting as if a friend who has been saying wonderful things about them has suddenly turned on them, and they are responding in kind. Those public servants who objectively reported the unemployment figures the Republicans enjoyed citing are now being castigated as a bunch of dishonest partisans because the Republicans do not like what the last report shows. Well, the GOP cannot have it both ways, the reports are either accurate or they are not. Allowing either party to cherry pick the reports they like and disparage the ones they do not like would be absurd.

Sources:Top Marginal Rates and Unemployment .