The highlight of this year’s Politicon was a debate between conservative intellectual Ben Shapiro and Cenk Uygur, creator and host of “The Young Turks,” an online network with over three million subscribers.
The debate was a rout, with Shapiro decimating Uygur’s rhetoric with facts – which were completely absent from anything Uyger had to say. He lost his composure relatively quickly, often lashing out at the audience upon being booed. On a number of occasions he told the audience to “just look it up,” or “it’s called Google,” when some of his cliche talking points were laughed at.
You can see the whole debate below:
I’d like to highlight a specific part of Uygur’s argument.
One massively misleading claim he made was regarding taxes in the past. In the economic golden age of the 1950s and 1960s, the top tax rate was 91 percent, Cenk told us. With this statistic, Cenk claimed that high taxes lead to high growth. It’s a claim that’s “technically” true, and at the surface appears to call into question the claim that tax cuts are needed to spur economic growth.
Even a Google level inquiry debunks the talking point, but let’s go a little more in depth.
For starters, the top marginal tax rate hasn’t always affected the same level of income. Today, the top marginal income tax rate of 39.6% applies to all income during a year above $418,401. During the late 1930s, an individual had to earn $84.5 million (in 2014 dollars) before his income started being subjected to the top marginal tax rate of 79%.
From 1944-1963 an individual had to earn between $2.4-2.8 million (in 2014 dollars) before his income started being subjected to the top marginal tax rate of over 90%. During the 1970s an individual had to earn $1.5-$3 million (in 2014 dollars) before his income started being subjected to the top marginal tax rate of 70-77%.
THE MISLEADING CLAIM: (Paraphrasing Cenk Uygur’s argument) “The 1950s-60’s was an economic golden era despite us taxing people at 91%, therefore, we should be able to raise taxes today!” [1]
WHY THIS IS MISLEADING:
It’s true that the government once had marginal income tax rates as high as 91-92%, but contrary to what one might assume, that rate actually taxed people far less than current rates. How? We’ll explain below.As economists Daniel Baneman and Jim Nunns explain in their report entitled, “Income Tax Paid at Each Tax Rate 1958-2009,” in 1958 “there were 24 brackets (versus 6 by 2009) and the top rate was 91 percent” (versus roughly 35 percent today), but “only a SMALL FRACTION of returns were subject to rates above today’s top rate of 35 percent.” [2] The truth is, almost no one paid these high tax rates. “In 1963, for example, only 501 returns (of 64 million filed) reported taxable income in the 91 percent bracket.” [2] That’s only 0.00078% of all federal income tax returns, and it accounted for only 0.1% of total federal income tax revenue. It’s hard to get closer to “0” than that.
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Sources:
[1]
https://m.youtube.com/watch?v=SIAyudtNicY [2]
http://www.taxpolicycenter.org/ UploadedPDF/ 901456-Tax-Paid-Each-Rate.p df [3]
http://conversableeconomist.blogsp ot.com/2012/03/ top-marginal-tax-rates-1958 -vs-2009.html?m=1
And to prove that taxes were not monstrously higher at the time Cenk claimed they were, let’s look at rates versus revenues…
The laws of economics remain unaffected: High taxes are still not good for the economy.
Cenk embarrassed himself with his so-called “fact.”
He better stick to YouTube. Clearly, Cenk could never make it as an economist.
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