No New Deal/WWII, how long until US recover from Great Depression

RousseauX

Donor
Rousseaux,
You are not counting the excess profits tax. Top corporate tax rate during WW2 was either 90 or 95%. These went away after the war. They increased taxes during the Korean War. These went away in 1953. Please note that during the roaring boom of the 1950s there were three recessions in 10 years.
effective corporate tax rates takes into account things like excess profit tax: effective corporate tax rate basically calculates tax rate after all additional taxation + loophole/exemption/accounting tricks in a complex tax system. It's much better way to look at effective tax rates than picking out individual pieces of tax legislation and judge based on them.
 
effective corporate tax rates takes into account things like excess profit tax: effective corporate tax rate basically calculates tax rate after all additional taxation + loophole/exemption/accounting tricks in a complex tax system. It's much better way to look at effective tax rates than picking out individual pieces of tax legislation and judge based on them.
Effective tax rates are an outcome. Tax laws drive behavior. As rates go higher you organize your operation to minimize liability instead of maximizing output. Tax rates also affect risk/reward calculations.
 

RousseauX

Donor
Effective tax rates are an outcome. Tax laws drive behavior. As rates go higher you organize your operation to minimize liability instead of maximizing output. Tax rates also affect risk/reward calculations.

Tax laws are complicated: you are looking into singular pieces of legislation and making conclusions based on them. It's like there's a tax law book 1,000 pages long and you look at page 1 and think tax rates are higher or lower while ignoring the remaining 999 and ignore loopholes and deductions.

from tax policy center

top rates during 1950s was >50%, it was ~15% during the new deal

pNX8aV9.png
 
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Tax laws are complicated: you are looking into singular pieces of legislation and making conclusions based on them. It's like there's a tax law book 1,000 pages long and you look at page 1 and think tax rates are higher or lower while ignoring the remaining 999 and ignore loopholes and deductions.

from tax policy center

top rates during 1950s was >50%, it was ~15% during the new deal

pNX8aV9.png
You keep showing this chart. It is only part of the corporate tax burden. During the 1930s and 40s there was an excess profits tax of up to 90% on top of what you are quoting here. I haven't even mentioned the undistributed profits tax that FDR passed in 1936. The actual corporate tax burden was lower after the war then before and during the war which helped the recovery.
 

RousseauX

Donor
You keep showing this chart. It is only part of the corporate tax burden. During the 1930s and 40s there was an excess profits tax of up to 90% on top of what you are quoting here. I haven't even mentioned the undistributed profits tax that FDR passed in 1936. The actual corporate tax burden was lower after the war then before and during the war which helped the recovery.
I trust the tax policy center to have included things like excess profit tax as part of their analysis, if you can show me otherwise I'll be glad to hear your evidence: with all due respect, you are not tax accountants familiar with the history of taxation in the 1940s: I give greater credibility to guys who actually study this for a living than whatever individual piece of tax legislation you keep bringing up without taking into account the entire tax system.
 
I have to agree with daveg1967 this chart does not include items such as excess profit tax or taxes on undistributed excess earning.
The maximum rate on US Corporations has been 35% since the early 1990's which aligns with RousseauX's chart, so the Tax Policy Center has not included these items in their calculations, it only shows the statutory rate for each year.
 

RousseauX

Donor
The excess tax rate was only from 1942-45, tax rates were still way higher post-war than it was during the new deal
 

RousseauX

Donor
I have to agree with daveg1967 this chart does not include items such as excess profit tax or taxes on undistributed excess earning.
The maximum rate on US Corporations has been 35% since the early 1990's which aligns with RousseauX's chart, so the Tax Policy Center has not included these items in their calculations, it only shows the statutory rate for each year.
above what level of income was the excess profit tax imposed on?
 
The excess tax rate was only from 1942-45, tax rates were still way higher post-war than it was during the new deal
There are other taxes that were imposed on corporations during the 1930's that are not captured on your chart. There was an increased tax on corporate dividends, another on undistributed profits. And you are not looking at the increase in taxes on personal income. All of these increased significantly between 1929 and 1939.

The Excess Profit Tax varied throughout the war with a top rate of 95%; if I remember correctly it was calculated using an average of earning from 1936-1939.
But again, it is not the issue; the question was whether rates increased during the period of 1929-1939 (Great Depression) which they did.
 

RousseauX

Donor
There are other taxes that were imposed on corporations during the 1930's that are not captured on your chart. There was an increased tax on corporate dividends, another on undistributed profits. And you are not looking at the increase in taxes on personal income. All of these increased significantly between 1929 and 1939.

The Excess Profit Tax varied throughout the war with a top rate of 95%; if I remember correctly it was calculated using an average of earning from 1936-1939.
But again, it is not the issue; the question was whether rates increased during the period of 1929-1939 (Great Depression) which they did.
the original argument was on whether the rates fell after the war relative to the new deal period

excess profit tax or w/e which got imposed during the war was a tangent
 
Free trade and capitalism has greatly improved the average living standards in India and Africa over the last 30 years. . .
In China, globalization has lifted a heck of a lot of people out of poverty.

But once we're talking about parts of the world other than China, I've read that the results have been quite a bit more mixed.
 
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Thousands of Mexicans March to Scrap NAFTA, as Their Government Fights to Save It


by Reuters, Aug. 17, 2017

http://fortune.com/2017/08/17/nafta-mexico-protest/

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. . . much like in America’s rust belt, Mexico’s small, mainly indigenous farmers have not forgotten painful competition they blame on the free trade deal.

“The great loser in these last 23 years has been Mexico, above all, the small farmers,” said Ernesto Ladron de Guevara, speaking for one peasant farmers union at a park across from Mexico’s Foreign Ministry.

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The U.S. is the richer country, and Mexico is the less rich country. So, you'd think that a free trade deal would benefit Mexican farmers at the expense of U.S. farmers. But according to this article, no, that has not been the case.
 
How US Policies Fueled Mexico’s Great Migration

David Bacon, Jan. 23, 2012

https://www.thenation.com/article/how-us-policies-fueled-mexicos-great-migration/

Roberto Ortega tried to make a living slaughtering pigs in Veracruz, Mexico. “In my town, Las Choapas, after I killed a pig, I would cut it up to sell the meat,” he recalls. But in the late 1990s, after the North American Free Trade Agreement (NAFTA) opened up Mexican markets to massive pork imports from US companies like Smithfield Foods, Ortega and other small-scale butchers in Mexico were devastated by the drop in prices. . . .
Yes, The Nation is a leftie publication, I think to its credit. :)

And it's making the important point that NAFTA has not exactly built up the middle class in Mexico.
 
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effective corporate tax rates . . .

You might be interested in this, too.

http://www.taxpayer.net/media-center/article/oil-companies-pay-11.7-percent-tax

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Over the 4 years between 2009 and 2013 the largest 20 oil and gas companies in the USA paid an effective corporate tax rate of 11.7 percent, according to information in a new report released late last week by the US based think tank Taxpayers for Common Sense.

Over the four years, the 20 largest companies reported a total pre-tax income of approximately USD 133.3 billion, and reported an income tax liability of USD 32.1 billion, an effective rate of 24 percent.

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And of course it gets complicated. One reason companies may avoid bringing money back into the U.S. is to avoid the top marginal rate of 35% for corporations. So, the lower effective rates is after taxes have already affected behavior, just a question of how much.
 
The U.S. is the richer country, and Mexico is the less rich country. So, you'd think that a free trade deal would benefit Mexican farmers at the expense of U.S. farmers. But according to this article, no, that has not been the case.
Is this not just a case of US farm costs are more than Mexican farm costs but not sufficiently more to offset the large US farm subsidies?
 
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Is this not just a case of US farm costs are more than Mexican farm Costs but not sufficiently more to offset the large US farm subsidies?

I seem to recall Sec Ag. Butz telling us that was his goal, subsidize US crop farming to competitive levels. That more less what his colleague Dr Kehrberg told me.
 
Is this not just a case of US farm costs are more than Mexican farm costs but not sufficiently more to offset the large US farm subsidies?
The Nation article also mentions that corn is "heavily subsidized by US farm bills."
https://www.thenation.com/article/how-us-policies-fueled-mexicos-great-migration/

Why would Mexican officials agree to such a deal? Either it was an honest mistake, or maybe they were putting the interests of large corporations ahead of their citizens. There'd be nothing unusual about that, in large variety of countries, including here at home.
 
Why would Mexican officials agree to such a deal? ? Either it was an honest mistake, or maybe they were putting the interests of large corporations ahead of their citizens.
It doesn't have to be corruption or incompetence, they could be simply thinking that its better to earn more from new manufacturing jobs from free trade to US than lose farming jobs due to cheap food imports from the same free trade deal? The fact that Mexican farmers have been hurt doesn't mean that overall the deal didn't help the Mexican economy, I have no idea of what the real balance is?
 
. . . they could be simply thinking that its better to earn more from new manufacturing jobs from free trade to US than lose farming jobs due to cheap food imports . . .
yes, this certainly would give an elected official plausible deniability, now wouldn't it?
 
And then there is that Giant mess with Weimer. And the UK came back on to the gold standard at the wrong rate. The pound needed to be about 40% weaker than OTL.
A too-high gold standard rate, along with the Dust Bowl drought and Smoot-Hawley tariff, was certainly a factor in the Depression. The much greater militancy of the UK working class – as seen graphically in the 1926 General Strike – and the fact that unlike the US the UK is resource-poor and lacked a powerful resource- or land-based upper class to contain class war, certainly made the devaluation required out of the question. In fact, the UK was in a long depression of its own for most of the 1920s as its goods were unaffordable abroad. UK industrial areas had in the 1920s unemployment exceeding the worst US figures for the Depression.

Changes in Federal Reserve policy to reduce the expansion of US money supply – which occured in 1927 and were the direct cause of the Depression – meant that many investments made earlier in the decade in critical capital goods became unviable. However, had the US continued to inflate it would have risked chronic inflation for long periods, which at the very least would have stalled real economic growth for the masses.

If there had been no New Deal and the US government (e.g. under a Southern Democratic President like Harry F. Byrd who I have heard intended to run for the 1932 nomination) had tried to cut back on Hoover’s spending, one might have seen more protest in Britain and France, leading either to:
  1. the spread of fascist-type authoritarian rule to those outposts of democracy in the 1930s as the ruling class realize there is no other way to counter class war or
  2. an alliance of a reactionary US regime with the traditionalist regimes of Austria (Dollfuß), Portugal (Salazar) and various small countries in eastern Europe (e.g. Piłsudski in Poland and Smetona in Lithuania) in a mortally divided Europe where the remaining (Scandinavian) democracies have no choice except to ally with Stalin’s Russia or
  3. indigenous Communist revolution in France and Spain leading to a two-front war with the Nazis and possible American aid thereto analogous to (2)
 
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