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  • n_tres_ted2003 n_tres_ted2003 Nov 23, 2012 5:35 PM Flag

    The Math of Taxes

    The graduated income tax was conceived as a primary instrument for use to destroy productive and influential people known as the middle class. Read H. G. Wells' book "Anticipations ..." published in 1901. Why would anyone want to do that? Wells explains why. A very few people are entitled to rule, and they should be able to return to the historic model of two classes - escaping the dictatorship of democracy imposed upon them by that great grey mass of people who had upset the old stable system of rulers and slaves. The book made Wells an intellectual rock star. Teddy Roosevelt invited him to the White House as honored guest. Franklin and Eleanor Roosevelt invited him for extended visits with them and the Brain Trust, and Wells praised them highly, saying the Brain Trust were the kind of men who would be able to take "full power." Unless you read Wells' book (online at Univ. of Chicago library), you can't imagine what Wells and the ruling elite had in mind for "unnecessary" people after the "new republic" was achieved.

    In 1921, the Secretary of the Treasury was Andrew Mellon, a man far wealthier than Franklin Roosevelt. Mellon proposed cutting income tax rate from a maximum of 73% (plus 4% basic tax on all income) to no more than 40% top rate. Senator LaFollette of Wisconsin called for Mellon to resign. Mellon was able to push through a cut to 50% top rate. The tax rate cut produced sufficient increase in tax revenues (and growth in production) to provide a budget surplus. The surplus was plowed back into another tax cut, which produced another budget surplus. Coolidge was elected in a landslide in 1924. Mellon continued the rate cutting and budget surpluses through 1928, when the top rate reached 25% and the first $4,000 of income was not taxed at all. In those days, $4K would buy nearly 200 oz of gold, which would cost about $346K today.

    Coolidge could have been re-elected in another landslide, but he chose not to run again - possibly because he had learned of what the ruling elite planned to do to the country in 1929. With Coolidge bowing out, Herbert Hoover was nominated by Republicans. Hoover, like LaFollette, Teddy and Franklin Roosevelt, was a "progressive" who supported activist government and higher tax rates - i.e., the agenda of the ruling elite. Hoover didn't lift a finger to stop the rampant trading fraud on Wall Street which produced the Great Crash, then signed Smoot-Hawley Tariffs which reduced U. S. world trade by two thirds within 18 months and increased unemployment to 25%. Then Hoover put income tax rates back at the 1920 levels effective January 1, 1932.

    But all this is just history. Not as attractive as spinning stories that fit the ideology of one party or the other. Thanks for bringing up the subject.

 
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