A Step-By-Step Guide On How To Nationally Embrace Economic Radicalism
Written By: Anton Sawyer
That title reeks of click-bait, and I’m not going to lie, there is a level of verbal subterfuge going on. Yet at its core, the article today (when viewed through the “right” eyes), contains every element of economic radicalism that has permeated the quotes and headlines from conservative news outlets for years.
Of course, misdirection is what I live for, and the use of the phrase “radical” is nothing more than an attempt to instill fear and terror in those who have a very limited understanding of 20th century American economic history.
Today I wanted to look at the past to see where our future should be headed, what has worked before, and how every “radical” notion I have mentioned has unwittingly been echoed by Trump Nation … kind of. But before any adventure begins, we need a setting. How did the United States get to setting new records consistently when it comes to income inequality?
The two greatest contributing factors as to how and why we have gotten to the record levels of income inequality we enjoy in the 2020s are found in the lack of actual taxes collected, and the differential in numbers and percentages between now and the golden economic era of the US.
In an attempt to maintain complete transparency, all research and statistical fact-checking for this article, and all articles, can be found at our site's bibliography linked here.
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Actual taxes collected:
Before we can even discuss the specific tax brackets and their connection to minimum wage, the primary obstacle that prevents any closing of these gaps has to come from the IRS and their inability to collect on billions of dollars in owed taxes.
The wealthiest 1% of Americans are responsible for more than $160 billion of lost tax revenue each year, according to a 2021 report by the US Treasury. In her article, “The Case for a Robust Attack on the Tax Gap,” Deputy Assistant Secretary for Economic Policy Natasha Sarin did an economic deep dive into the realities of how much the wealthy truly pay in taxes each year. She explains that the “tax gap”—the difference between taxes that are owed and collected—totals around $600 billion annually and will mean approximately $7 trillion of lost tax revenue over the next decade. And in a 2018 article written by Bishop Toups of the tax law firm “Daily, Montfort, and Toups,” it was revealed just how small the chances are from facing any real accountability when it comes to fibbing on your taxes. Though the IRS estimates that 15.5% are not complying with the tax laws in some way or another, only 0.0022% of all taxpayers were convicted of tax crimes.
Whether through legislation on tax codes, better IRS enforcement policies, or anything else that will force the root cause of these tax-gymnastics to be stopped is implemented, it really doesn’t matter what the percentages of annual income and their taxation amounts are. Nothing ever comes of nothing. For simple math, let me put it this way: take the total of 89% of $500,000. That number multiplied by 0 is still 0.
But let’s play a game of “what if …?” Let’s assume that we close many of the loopholes and were able to get a majority of those missing tax funds collected, there’s still a problem. When looking at the percentage differences between now and our countries’ past, there are other obstacles to consider in closing the income inequality gap. The tax brackets and hourly minimum wage in comparison to average annual household income come to mind.
The differential in numbers and percentages between now and the golden economic era of the United States:
When it comes to my views on what should be done to get the American economy to be beneficial to all economic classes, I look to 1963. 1963 was a great year for looking at the continued strength of post-World War II economics in America. Though I really could have taken any of the numbers from between 1948 to 1970 to illustrate my point, 1963 was not too close to the post-war boom, it was before Vietnam, and was still years away from the disastrous policies of the Nixon administration and the recession they put the country in.
In 1963 it was not uncommon for a household to be able to afford a mortgage, car payment, food, bills, and two kids with one income. In 2021, it would take at LEAST two-and-a-half to three incomes to afford those same things. This is what I meant in the opening paragraph by having something in common with Trump Nation; when they say “Make America Great Again,” they mean that same time frame I am getting my statistics from. The big difference between myself and that group is they want the social laws and other societal elements they don’t like to go away, and I look at the economic boom at that time and want to return to those numbers.
It’s really that simple. The US Department of Labor, among all other government agencies which receive funding from the taxation of the public, have made their numbers available to anyone who wants to look. The History of Federal Minimum Wage rates between 1938 and 2009 are available. The complete history of tax brackets can be viewed dating back to 1915.
So what are these magical numbers I keep speaking of that we need to return to?
90% and 2.6%
90% represents the top tax bracket for America’s highest earners in 1963. In fact, between 1948 and 1963 it never went below 90%. And from 1964 to 1972 it never went below 70%. This is in stark contrast to 2021 where the top tax rate is topped out at 37%. Removing the fact that the top earners aren’t paying taxes in the first place, the taxes that are required of top earners in 2021 is 33% lower than during the peak of our nation’s economic success.
2.6% represents the percentage the federal minimum wage had in relation to annual household income in 1963. In 2021, it is 1.3% … half. When you look at the history of the federal minimum income, between 1950 and 1963 it was increased four times. That doesn’t seem like a lot until you look at the amounts of the increases. Between 1950 and 1963 it nearly doubled because it was designed to match inflation. Due to naturally occurring inflation, every couple of years the minimum was raised to meet the needs of the average American. It’s no surprise to see that in 1963 you could run a household on one income, and now it takes a minimum of two to three, given that we have only half of the buying power.
To those who are screaming “socialism!” at their screens, just know it sounded so much better when New York Governor Al Smith used it as an attack for the first time in 1936 against liberals. Go ahead, repeat the same attack point that’s been used for almost 100 years, it doesn’t hurt my feelings (and it doesn’t make it accurate either). Also, I do not care whether the person putting forth a piece of economic legislation has an “R” or a “D” next to their name; whoever gets us closest to the 90% and the 2.6% first will close the income gap the fastest, period. If you are a political leader and your plan clearly won’t get us to those numbers, either by deception or design, you won’t get my support. I know, this entire concept of looking at what objectively worked, how we as a nation have drifted away from what worked, and what can be done to take us back to those same numbers … it’s just TOO RADICAL.
It’s always important to know that there will be people who are incapable of understanding that what they’ve rallied behind can’t work. Even the liberals who have heard DNC leadership throughout the years talk about wealthy Americans “paying their fair share,” have watched legislation be enacted that has zero power in guaranteeing this battle-cry, and many of their constituents know it—and are subsequently getting tired of these shortcomings. Understanding this lack of self-awareness found online has lead me to a new tactic that works, and works well. Whenever someone yells “MAGA!” at me online or in person, I respond with “numerically, I agree.” It usually stops them in their tracks because though I agreed with them, there’s a caveat they know they don’t understand. This is usually followed by them turning their attention to someone they know they can get a rise out of. Sometimes deflection is the best medicine. Now that you have all the statistical data you’ll need, maybe give it a try some time on some troll-warrior? Lord knows they aren’t hard to find.
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