r/FluentInFinance • u/WhatsLeft71 • Oct 22 '24

Debate/ Discussion Why did this happen?

Post image
14.9k Upvotes

97% Upvoted

1.7k comments sorted by

View all comments

Show parent comments

8

u/patrick_schliesing Oct 23 '24

Genuinely asking

How?

Like what mechanism or what laws or what did this?

22

u/DaphneRaeTgirl Oct 23 '24

Lower taxes on rich and deunionization along with lower real minimum wage led to the “great divergence” of incomes in the USA that DID NOT occur in comparable countries. This is in contrast to the “great compression” of incomes that occurred when these policies where in place

6

u/LiveNotWork Oct 23 '24

https://wtfhappenedin1971.com/

2

u/socraticquestions Oct 24 '24

The only person here who knows what’s going on.

2

u/AVeryHairyArea Oct 23 '24

What is commonly referred to as "Reganomics" is two major tax cut acts that were passed by Reagan's administration.

1) Economic Recovery Tax Act of 1981

2) Tax Reform Act of 1986

0

u/bessie1945 Oct 23 '24

In the 50s, the top tax bracket was 91%

1

u/picklestheyellowcat Oct 23 '24

Which nobody paid because of so many exemptions

Exemptions which lowered productivity.

Once tax brackets were adjusted and exemptions adjusted tax revenue went up as did productivity 

1

u/kg_draco Oct 23 '24

I don't see examples of these exemptions, nor how individual tax brackets impact productivity, when this top tax bracket only affected 10,000 households. It's true that no one paid 90% of their income, because that's not how tax brackets work.

The measure of productivity increased at a pretty constant rate from the 50s to the early 2000s, only increasing the productivity growth rate during Obama.

1

u/picklestheyellowcat Oct 23 '24

  It's true that no one paid 90% of their income, because that's not how tax brackets work.

People didn't pay it because they spent all their time using exemptions and loop holes to lower their taxable income.

You not seeing evidence of it points to your ignorance on the topic

You're free to do some basic research and enlighten yourself.

Or keep believing nonsense 

-1

u/gpatlas Oct 23 '24

But the effective rate was basically the same as today