Back in 1943, with friends of the fortunate in Congress doing their best to ease the war-time tax burden on America’s wealthy, FDR asked the IRS to research how many taxpayers were making over $67,000, about $1 million in today's dollars.
The IRS would go ahead and compile the list FDR wanted. But the IRS did more than just identity the 2,090 taxpayers who collected income over $1 million, inflation adjusted, in 1941. The IRS list also indicated how much of each wealthy taxpayer's reported income had gone to federal income tax...
The newly released 1943 data make for absolutely stunning reading. We have simply never had clearer evidence of just how much America used to expect out of individual wealthy Americans — and just how little, by comparison, we expect out of our wealthy today.
We learn, for instance, that 1941's top executive at IBM, Thomas Watson, collected $517,221 in compensation that year, about $7.7 million in current dollars. Watson paid 69 percent of his total 1941 income in federal income tax.Last year, today's chief exec at IBM, Sam Palmisano, took home $24.3 million for his executive labors. We don’t know how much income above that sum Palmisano reported in 2009, or exactly how much of that total he paid in taxes.
But we do know that
the 13,374 Americans who reported incomes over $10 million in 2008, the latest year with IRS stats available, paid an average 24.1 percent of their taxable incomes in federal income tax....Watson in 1941 paid almost three times more of his income in federal income taxes than Palmisano likely paid in 2009.Democracy cannot be safe, President Franklin Roosevelt warned Congress in 1938, “if the people tolerate the growth of private power to a point where it becomes stronger than their democratic State itself.”
The richest 1.5 percent of Americans, FDR would go on to note in that 1938 message, were raking in as much income as everyone in America’s bottom 47 percent combined.
Our contemporary super rich, research from Berkeley economist Emmanuel Saez documents, are actually taking home a substantially higher share of America's income than their counterparts back in FDR's time.
Americans of FDR's time worried deeply about the concentration of economic power. Today, 70 years later, we have cause for concern even greater.
http://www.ourfuture.org/blog-entry/2010124805/tax-rich-lesson-finally-goes-public
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