Mujer Alta posted this on Yahoo answers to answer how the 1% could still make money if their tax rate was so high in the 1950s. : Because of the tax laws at the time, in the 1950s companies could decrease the amount of taxes they owed by depreciation and by re-investment. So it paid for companies to stick around and to buy new equipment as their equipment aged and became outdated. It paid for them to expand into larger buildings. Executives didnt get the salaries and benefits they get today and didnt expect to. Most companies in the 1950s, no matter how big, were still either family owned or, if theyd gone public, still had family members of the company founders working for them. These executives had more than just a monetary relationship to the company and the success of the company was more important to them than how much money they could suck out of company profits. Today, the tax laws allow companies to also shift profit to executive salaries and since the people making these decisions are the ones who benefit the most, of course, profits going into executive wallets instead of back into the companies. Under this system, Americas lost most of the most stable parts of its economic system and created a relatively immense wealthy class.
Posted on: Wed, 19 Mar 2014 20:04:22 +0000
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