In reading Andrew Mellon’s 1924 book, Taxation: The People’s Business, I am pretty impressed with his general trend of thought. There are some areas where I don’t agree with him, such as on whether taxes are actually the proper way to fund government, but on the whole I like what he says. He is in favor of a government primarily restricted to protecting the rights of the citizens and relying only on such taxes are a necessary to pay for legitimate functions of government. He certainly was opposed, as I pointed out in a previous quote, to pitting one group of taxpayers against another to pass legislation (i.e. the 99% vs the 1%).
One of the foundations of American civilization is equality of opportunity, which presupposes the right of each man to enjoy the fruits of his labor after contributing his fair share to the support of the Government , which protects him and his property. But that is a very different matter from confiscating a part of his wealth, not because the country requires it for the prosecution of a war or some other purpose, but because he seems to have more money than he needs.
The “fair share” he speaks of here, if I understand the terminology of the times correctly, was a maximum of 31% for anyone making more than $100,000 per year (which is about $1.3 million in today’s terms). Today the top rate is 39.6% for those making $200,000, which is about $15,000 in 1924 terms, so a higher rate affecting people of more modest means. I believe at that time those that made less than $6000 paid no tax, but I am not positive on that. That is about $66,000 in today’s terms. (Can you imagine a government official calling for tax reforms such that those making less than $66000 paid nothing and the top rate did not kick in until $1.3 million?)
He goes on in the same paragraph talking about the dangers of confiscating excessive amounts of money from the wealthy via high tax rates, which he viewed as attacking the accumulated capital of the country. He understood that such capital was vital to the continued prosperity of the country.
Any policy that deliberately destroys that accumulated capital under the spur of no necessity is striking directly at the soundness of our financial structure and is full of menace for the future.
Sadly many of today’s politicians have forgotten, or never learned this lesson.