Taxes
What are Taxes?
Taxes are compulsory financial charges imposed on a working citizen or business by a governmental organization in order to fund government spending and various public expenditures.
Most countries have a tax system in place, in order to pay for public, common societal, or agreed-upon national needs and for the functions of government.
Nations that do not collect taxes typically nationalize major businesses in order to fund public and national needs. (Think socialism or communism)
What we think people will find interesting:
- We think people will find it interesting to notice that taxes almost always go down, even though many people feel that they go up and down. Each party only had one president who raised taxes on the working class (Reagan) and (Carter).
- Each party’s average is identical in both the upper class and working class with the only real difference being in tax rates of the top 0.5%. That seems like a lot of attention being given to half of one percent of the USA.
Sidenote:
This is another category where we removed one president from the “average” data. WWII was during Roosevelt’s time in office and the USA needed to gather ridiculous amounts of money in order to fund the war. We feel again that these were extreme circumstances and not indicative of the regular operations of the USA. These were extreme circumstances where all Americans were asked to go above and beyond what would normally be expected.
The Data:
There have been so many tax brackets in US history that you cannot do a direct comparison to all of them. In 1940, there were 24 income brackets, in 2022 there are 7. Here we show the tax rates in 2 categories, wealthiest, and working class.
We did notice an interesting correlation between tax rates and the state of the economy. In the early years the tax rates were very high, and the economy grew at a fantastic rate. Once the nation was doing well, taxes could be decreased. From 1961 to 1981 the rates were lowered, and the economy still grew but at a lesser rate. In the early 80’s taxes (on the elite) were drastically lowered and what followed was a crash in the economy. In the early 90’s taxes were raised again (on the elite) and the economy started to grow. Then in the early 2000’s taxes were lowered again (on the elite) and once again the economy fell. And again in the 2010’s taxes were raised again (on the elite) and once again the economy started to grow. It would appear (at least for economic growth), that the tax rates used from 1996 to 1981 were perfect.
Tax Rates VS Economy:
