If income distribution still worked the way it did in the mid 20th century, most people wouldn't need to work 40 hours a week for the paltry income they receive today.
Did you seriously just ask a stranger on HN to explain one of the biggest sociopolitical issues of the last 10 years?
Here's an introduction: the GI Bill sent 2 million men to college for free from 1945-1955. In 2017, by contrast, the US has $2 trillion in outstanding student loan debt.
That's comparing Apples to Oranges. More like Apples to Cars.
The US spends more as a % of it's GDP and more $/capita than any nation on earth on higher education - and sends a considerably larger share of it's population to college than most other nations, certainly any European nations where college is free.
The % of young people going to college has increased dramatically from 1950 to 2016.
And FYI - if you join the Army today, you can still get your education subsidized :)
'Raw' dollars debt doesn't help us understand the picture that much, moreover, if everyone in America started going advanced degrees, that would also increase student debt, but that would be a good thing, no?
Americans are on the whole much wealthier, and the opportunity that young people have today vis-a-vis 1950 is so much that it's basically unthinkable back in the 1950's.
That said, it's not so good for working class people without jobs, and little job stability.
"The top tax bracket in the 50s was at 90%, for starters. It all really goes back to tax policy."
The 1% do not earn their income in salary, they earn it in capital gains.
What matters is 'actual tax receipts' not necessarily the brackets.
The fact you quoted is effectively correct, but it's a common 'internet meme distortion'.
Aside from a 'blip' due to WW2, US Government share of GDP has been increasing over time, since the dawn of the Republic, not decreasing - meaning that there has been consistently more socialization of services and industry - not less.
Ooh I love when somebody calls me out on the "90% in the 50s" figure. Let's play this game.
The reason it was ok back then was because it incentivized long term growth. As a result of the tax "reforms" of the 80s, it became easier than ever to leverage yourself into a hostile takeover, gut a company, sell it, and pocket the cash for yourself at a far lower tax rate than most of the corporate raiders had ever seen in their careers.
Not to mention the innocent people who had their livelihoods upended and pensions gutted, and blamed, then as now, for not working hard enough.
So we have more money chasing financial gain than productive output, less support if not absolute disdain for the average worker, and corporations paralyzed to do anything but push short term gains as high as possible lest Wall St alert an "activist investor" to their next target.
How do you make a resilient society to last through generations when the foundation is being sold out from under it?
Again - the 90% tax bracket in the 1960's applied to income - not capital gains.
Ergo - a reduction in that income tax bracket would do nothing to incentive M&A activity wherein surpluses would be taxed as capital gains (i.e. at a lower rate than income).
In fact - the reduction in income tax breaks would have the opposite effect you describe - it would encourage companies to pay more regular income, as opposed to M&A type transactions which will be taxed via capital gains.
Second - M&A activity does not inherently have anything to do with 'short term' or 'long term'. M&A is just as much a strategic activity as anything else. You are a ware that 'HN' is part of YCombinator, at the very heart of this kind of activity, right?
Do you think that YC - which creates companies that will likely fail, or be bought - are an example of 'short term' and 'myopic' thinking? Seriously? No way.
The very site you're writing your words upon is probably the best example of how important M&A and financial transactions are to the health of an economic ecosystem.
Some samples (cap gains rates, via whatever method is used on the site above):
2015: 25%
2010: 15%
2005: 16.1%
2000: 21.2%
1995: 29.2%
1990: 28%
1985: 20%
1980: 28%
1975: 36.5%
1970: 32.3%
1965: 25%
1960: 25%
1955: 25%
1950: 25%
1945: 25%
1940: 30%
1935: 31.5%
1930: 12.5%
1925: 12.5%
1920: 73%
1915: 15%
Cap gains rates policies have fluctuated a bit throughout the decades as well. One could argue (unless it's in one's interest NOT to) that there is at least some correlation between rates lower than 25% and hyperactivity leading to crashes. E.g. 1925/1930; 1985; 2000-2010. Or one could argue that correlation is not causation (in which case, why not "fund the commons", since tax rate doesn't affect business cycle outcomes, anyway).
