ently sitting on stashes of cash that have hit mega-billion levels, says Pizzigatti.
Money that could be invested in creating jobs sits instead in income-generating financial assets that only sweeten corporate bottom lines and executive paychecks.
A similar problem plagued the nation back during the Great Depression, and progressives pushed for a stiff tax on these “retained earnings.” In 1936, Congress passed a watered-down version of this tax that didn’t last and didn’t make much of an impact.
A stronger tax today just might.
Five: Cap income at America’s economic summit.
In a world in which Congressional Republicans refuse to even talk about raising taxes on top earners by even 3 percent, this is probably Pizzigatti’s most pie-in-the-sky idea. But if we want a rational discussion of revenue, it’s worth talking about.
First, the historical context:
In 1942, in the midst of a war-time fiscal squeeze, President Franklin Roosevelt proposed a 100 percent tax on all individual income over $25,000, the equivalent of about $355,000 today.
Congress didn’t go along. But lawmakers did set the top tax rate at 94 percent on income over $200,000, and federal income tax top rates hovered around 90 percent for most of the next two decades, years of unprecedented prosperity.
America’s rich fought relentlessly to curb those rates. They saw no other way to hang on to more of their income.
So, what is Pizzigatti proposing? A restructured top tax rate that would give the rich what he calls “a new incentive.”.
We could, for instance, set the entry threshold for a new 90 percent top rate as a multiple of our nation’s minimum wage. The higher the minimum wage, the higher the threshold, the softer the total tax bite out of the nation’s highest incomes.
Our nation’s wealthiest and most powerful, under this approach, would suddenly have a vested interest in enhancing the well-being of our poorest and weakest.
Pizzigatti concludes his fascinating history lesson this way:
Years ago, progressives yearned to create an America that encouraged just that sort of social solidarity. They couldn’t finish the job. We still can.