You want to really make America Great Again? Aside from the obvious pun of don’t by shredded cheese, this requires a return to the economic, social support and infrastructure policies that were enacted during the period considered “great”, the lat 1950s through 1970s. What made that time period great as far as American economic power goes?
Under Republican President Dwight Eisenhower, and well supported by a bipartisan House and Senate, the United States changed its tax code to have a progressive tax rate, where those that could afford to pay more, paid more, and those that couldn’t, paid less. As a result of this, the top marginal tax rate in 1960 was 91%, which applied to income over $200,000 (for single filers) or $400,000 (for married filers) – thresholds which correspond to approximately $1.5 million and $3 million, respectively, in today’s dollars. Approximately 0.00235% of households had income taxed at the top rate. A taxpayer at the very bottom of the top 1% (in other words, one who is right on the boundary between the 98th and 99th percentiles) had a nominal income of $24,435, or about $190,000 in today’s dollars. (In 2008, this figure was nominally $380,354, or $400,000 in current dollars.) (Tax figure Source).
At the same time, corporate income tax was higher on profits, not income. More below.
What did this fund and fuel? Many things including, but not limited to:
- Social Security
- Interstate Highways
The way the tax code for companies was structures made it more over all profitable for the corporations to actually invest in themselves with R&D and paying living wages to their employees.
With tax funded public education at all levels, Kindergarten through College, Americans of all economic classes could afford to send their children to school for higher education, which is traditionally the gateway to prosperity.
Also during this time, while for-profit health care was legal, it was not the standard operational model that it is today.
All together, this mean that America had a growing economy fueled by the ability of people to spend and pay for things. Like new cars, and houses. These tax policies created the Middle Class as we knew it, and that in turn created the greatness of America in the latter half of the 20th Century.
So how do we return to that greatness? By returning to those policies. We need a return to a progressive tax that has those that can afford to pay more, pay more. We need a similar structure back on the corporate tax side as well, taxing effective profit, which deducts for self-investment in capital improvements, R&D, and wages to the employees (maybe calculated as a ratio to the CEO. In 1965, this ratio was 20 to 1. In 2016, it was 260 to 1 (source).
With a return to these tax policies, we can fuel a rebirth of the Middle Class, which is the engine that drives economic greatness, which drives the overall power of a nation.
We also need to return health care back to a not-for-profit model. Under the current system, people have to choose life or death based on how much money they have in the bank, and for many, choosing life results in financial ruin.
We need public education that is actually publicly funded. We need a single-payer health system. We need lots of infrastructure upgrades and expansion. We need wage increases, a solid social support system including Social Security and assistance to give a hand up to those in need. And this can only be funded by a return to the Eisenhower-esque progressive tax code.