Malcolm Gladwell: Taxes Were High and Life Was Just Fine

Malcolm Gladwell, the bestselling author of The Tipping Point, Blink, and Outliers, has lost some friends lately among geeks (term used lovingly, if not self-referentially) and conservatives. First came the suggestion that Twitter hasn’t made human change agents obsolete. We still need MLKs and Gandhis to change the world. And then, speaking at The New Yorker Festival earlier this month, Gladwell had to remind us of an inconvenient historical fact. During the Eisenhower presidency, taxes on the wealthiest Americans peaked at 91% (more than double what they are today). And, even more galling, life in America was just fine, even downright good…

Thanks Mary for sending this our way. Always appreciate the good tips.



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by | Permalink | Comments (9) |

  • mat

    amazing

  • Oschisms

    “life in America was just fine, even downright good…”

    Not if you were black.

  • Mike

    Good point, Oschisms.

    And it raises the question: Were the middle and upper classes in America happy to support a sharply progressive tax structure in the 1950s (before the Great Society) because they perceived that the benefits would accrue to their own ethnic group?

  • Paula Hannah

    It wasn’t good if you were in any of the minority groups, especially if you were black. Lynching were not uncommon and the KKK was part of the social fabric of the south. Women were expected to stay home, be quiet and ‘fluff the nest’ for their husbands who had total control of the finances. Girls went to college to get their MRS’s. Everyone was fine, downright good, if they stayed in their place and conformed.

  • http://www.planetpeschel.com Bill Peschel

    It was also the post-war, post-Depression period, when consumer demand had been suppressed since the 1930s. Keep people from buying houses, cars, radios, whatever for a couple of decades, why be surprised that you’d get an explosion of buying which spreads money throughout the economy and resulting in a manufacturing and business expansion to meet it. Result: Good times (well, except for minorities, women and people worried about the atomic bomb, Communist expansion and other small problems).

    Jeeze, was Gladwell born yesterday?

  • Drew

    I believe some are getting issues confused: Gladwell’s speaking to a very specific point here. Not Income Inequality between different segments of the population, but between the very lowest earners and the very highest. As the highest salaries have gradually reached stratospheric levels, that inequality has increased. And since the argument is usually made that unhindered earnings are somehow “better” for one reason or another, I think it’s utterly valid and interesting to look back in history in order to decide if it IS, indeed, better.

  • Mike

    I understand, Drew. But perhaps the two issues are not entirely separate. In the 1950s, tax money didn’t go toward programs like Medicaid and Supplemental Nutrition Assistance. When the government funded the creation of the Interstate Highway System, for example, people didn’t see that as a “redistribution of wealth.” Much of this current hatred toward government stems from resentment over this redistribution, and when you consider the demographics of the Tea Party, for instance — overwhelmingly white — it’s fair to ask how much of that is tied to race. My hunch is: a lot.

    By the way, Wikipedia has an interesting table with a breakdown of federal marginal income tax rates over the last century. It seems Gladwell got his figure a bit wrong. The highest tax rate for the wealthy was actually 94 percent at the end of World War II. The highest rate in the 1950s was 92 percent. It’s interesting that, even after Kennedy lowered taxes in 1963, the highest bracket remained between 70 and 77 percent — right up until Reagan came along. (And do you remember Reagan’s campaign rhetoric about “welfare queens?”)

    http://en.wikipedia.org/wiki/Income_tax_in_the_United_States

  • http://the-wonderful-world-of-economics.blogspot.com Martin

    @mike

    Interesting ideal about racism being a big part of the drive for people wanting low taxes now and where ok with high taxes then (if the money only went to whites)

    I would say that back then people cared more about america and today we are more about self and that maybe a huge factor but I think the issue may really a mix of the fact that people don’t know that historically the richest american are paying pretty low taxes and the fact that the top tax rate mixes millionares and the upper middle class.

    The later was something done in the 80′s when they changed the tax code and drop a few tax bracets (all on the upper end) and I think it was planned by those who economic view is against taxes because by tie-ing middle class people with the rich you have a large group of people that will get upset when there is talk of raising taxes on them.

    Now the former is a big factor because people don’t even know that pushing for higher taxes on the rich is something that could be put on the table when talking about this stuff.

  • Pat

    Another thing, much of this country still actually remembered the Depression and they remembered WWII. The idea of the common good was not as foreign as it is today. They actually knew that we were better off as a group working together, great and small. Today, it is all “I’m in, start the car”. (And much of the growth was not the big projects but things like the GI Bill benefits for education and home ownership, and the expansion of our public education system particularly for colleges.)
    While I’m not denying racism, it clearly existed, I do think that it is a far greater factor in our current cult of the individual, where people refuse to recognize the benefits they have accrued from government services while denying them to undeserving others. That brown, black, yellow, female, gay person shouldn’t get grants to go to college because then they’ll be competing with me for the fifteen dollar an hour no benefit job at the BMW plant.

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