First, for accuracy: the personal top marginal income tax rate during the Reagan-era was not 90%. When Reagan took office, it was 70%, which is where it had been since the 1960s. The Economic Recovery Tax Act of 1981 dropped it to 50% and when he left office it was at 28%. Basically nobody actually paid the top marginal rate because there were so many exclusions, deductions and shelters. Many of the biggest went away when the rates dropped.

As far as the corporate tax rate, the top marginal rate was 46% in the early 80s and dropped to 34% after the Tax Reform Act of 1986.

Accuracy aside, the big problem with your comment is that you're conflating consumer protection with tax rates. You can make all sorts of legitimate arguments about the wealth situation in the world today but let's first acknowledge that not every profit-making company engages in the type of despicable behavior Facebook has.

If corporations were taxed at 90%, you'd see mass conversions to pass-through entities, profit-shifting (moving to overseas domiciles) and capital flight, massive deductible spending to zero out taxable income, a huge drop in domestic investment, a huge increase in debt financing, and so on.

Corporate tax is not meant to be punish businesses for harmful actions they might theoretically engage in. That's what the tort system is for, and even then, the system is primarily compensatory with punitive damages reserved for egregious conduct.

So we don't need to use tax to stop Zuck from Zucking. We need the tort system to work and, arguably, stronger consumer protection laws that acknowledge the harms of these products much the way we eventually acknowledged the harms of products like cigarettes.

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antonvs 2 hours ago | parent | next [-]

> First, for accuracy: the personal top marginal income tax rate during the Reagan-era was not 90%. When Reagan took office, it was 70%, which is where it had been since the 1960s.

First, for accuracy: it was above 90% from WWII up until 1963.

> the wealth situation in the world today

"The (developed) world" is not doing nearly as badly as the US. If the US was more closely aligned with Europe in terms of inequality, it'd be in much better shape.

> let's first acknowledge that not every profit-making company engages in the type of despicable behavior Facebook has.

I in no way claimed otherwise. Perhaps read my very short comment again, more carefully this time.

	▲	ElProlactin 16 minutes ago \| parent [-]
		> First, for accuracy: it was above 90% from WWII up until 1963. Reagan took office in 1981. Is it that difficult to acknowledge that you posted something that was inaccurate, and move forward from it? Also, as noted, basically nobody ever actually paid these rates. > "The (developed) world" is not doing nearly as badly as the US. If the US was more closely aligned with Europe in terms of inequality, it'd be in much better shape. Wealth inequality is higher in the US than it is in Europe, and this certainly has some nasty effects. But there's still significant wealth inequality in Europe and Europe has its own major economic problems, including wage stagnation, higher inflation (largely due to overdependence on imported energy), slower GDP and productivity growth, lower R&D spending, high structural unemployment (in some countries), greater reliance on bank lending due to weaker markets for equity financing, an overall environment that makes it harder for high-growth businesses to emerge, etc. If you could somehow reduce wealth inequality in the US while avoiding the ills that plague Europe, then yes, the US would be "in much better shape." We should also note that Europe isn't a country. In Sweden, the top 10% hold almost 75% of the wealth. In Germany, it's around 63%. Belgium has the lowest figure at around 43%. In the US, the top 10% holds 68% of the wealth, but what distinguishes it from countries like Sweden and Germany is the stunning growth in what the top 1% holds. > I in no way claimed otherwise. Perhaps read my very short comment again, more carefully this time. Your comment directly implied that taxation should be used to prevent companies from "getting to the point when it feels 'outlandish' to them to be punished for trying to destroy the society that granted them their wealth." This isn't the purpose of taxation and if you tried to use it as such, you'd fail spectacularly.

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CaptWorld 8 hours ago | parent | prev [-]

Very sensible comment from HN after a long time as it became reddit-lite.