Bernie Sanders & Dwight Eisenhower & Taxing Billionaires
by John Spritzler
March 4, 2020
The URL for sharing this article is https://www.pdrboston.org/sanders-s-fake-tax-the-rich
Bernie Sanders declared that he intended to tax the billionaires LESS than President Eisenhower did. Here are Sanders's words, as reported by politifact.com:
Income tax rates were 90 percent under Eisenhower, Sanders says
U.S. Sen. Bernie Sanders, I-Vt., wouldn’t reveal just how high he’d raise income taxes on the rich during the Iowa presidential debate, but he guaranteed it wouldn’t be as much as it has been in the past.
In order to pay for making college tuition-free for Americans, Sanders said that Wall Street owed the middle class for bailing it out during the recent financial crisis. He said he would demand "that the wealthiest people and the largest corporations, who have gotten away with murder for years, start paying their fair share."
"Well, let’s get specific, how high would you go?" CBS News moderator Nancy Cordes asked. "You’ve said before you’d go above 50 percent. How high?"
"We haven’t come up with an exact number yet, but it will not be as high as the number under Dwight D. Eisenhower, which was 90 percent," Sanders answered.
The truly significant thing about Sanders's statement is that he admits (or brags, depending on one's point of view) that he intends to tax the billionaires LESS than they were taxed in the Eisenhower administration.
I call this an admission, not something to brag about!
Why? Because the billionaires during the Eisenhower administration treated ordinary people like dirt, in ways I will discuss shortly, and they will continue to treat us like dirt even if Bernie Sanders is president and they are taxed even less than before during the Eisenhower years.
Before discussing how the billionaires treated ordinary people like dirt during the Eisenhower administration, let's put this "90%" tax rate in some perspective.
Politifact rates Sanders "90%" claim as true. Yes, it's true, but it's not terribly significant. Here's why. The 90% figure refers to a marginal tax rate. This means that only income in excess of a certain relatively high amount is taxed 90%. As politifact explains:
Before we go further, let’s review what the marginal tax rate means. It’s the tax rate that’s applied to the last dollar earned. The U.S. tax system is based on brackets. The top marginal tax rate applies to the highest bracket. Income is taxed at higher rates as more is earned.
We turned to the Tax Foundation’s federal income tax rates history, which documents figures going all the way back to 1913, when the income tax began with the ratification of the 16th Amendment.
During the eight years of the Eisenhower presidency, from 1953 to 1961, the top marginal rate was 91 percent. (It was 92 percent the year he came into office.)
What does it mean, though? For the duration of Eisenhower’s presidency, that rate affected individuals making $200,000 or more per year or couples making $400,000 and above per year.
In 2015 dollars, that's roughly $1.7 million for an individual and $3.4 million for a couple.
What would this mean for Jeff Bezos, with his wealth of about $100 billion? Let's assume that Bezos's income is 5% of his wealth, which would be $5 billion /year. Let's assume also that ALL of this income is taxed at 90% (the marginal tax rate of 90% would only tax some of it at that rate.) Then Bezos's income would be "only" 10% of $5 billion, in other words his annual income would STILL be $500 million.
People like Jeff Bezos, even if taxed more than billionaires were taxed under the Eisenhower administration, would still be a ruling plutocracy; they would be the ones calling the shots, just as they are today.
The Billionaires Treated Ordinary People Like Dirt During the Eisenhower Years
How did the billionaire upper class treat working class Americans during the Eisenhower years? The answer is, it did all in its power to prevent working class Americans from winning improvements in their lives. Perhaps the most visible evidence of this is the way that the upper class used the power of the government to break labor strikes and thereby prevent workers in large labor unions from winning their demands.
In 1959 there was a large labor strike of steel workers in the United Steelworkers of America (USWA). 500,000 steel workers were on strike from July 15 to November 7. Eisenhower responded to the strike by using the anti-labor Taft-Hartley Act to get an injunction ordering the workers back to work. Read the details here. At one point "hundreds of thousands of steelworkers angrily marched back into the mills (often under banners reading “Ike’s slaves”."
The U.S. Bureau of Labor Statistics reports under "Analysis of Work Stoppages, 1959":
"Despite a contract extension in the North, Captain William V. Bradley, president of ILA, pledged support of the striking southern dockworkers and declared that members would not work on ships diverted from the South. The stoppage spread to the entire east coast, shutting down ports from Maine to Texas, effecting some 50,000 workers and 220 cargoships...As in the case of the steelstrike, the emergency provisions of the Taft-Hartley Act were invoked to end a longshore-men's strike at East and Gulf Coast ports."
The Eisenhower administration, like those before and after it, worked to instill in the general public an entirely unwarranted fear of a bogeyman enemy, for the purpose of making the public obey the upper class as it diverted social wealth from useful things such as schools and hospitals and instead towards the profits of the military weapons manufacturers. The bogeyman enemy was Communism, and the upper class during the Eisenhower administration--as before and after it--ARMED THE SOVIET UNION (see the gory details here) to ensure that it would be sufficiently scary to perform its role as the bogeyman enemy.
As part of this war against Communism (an "enemy" that the upper class was at the same time arming!), Eisenhower waged the Korean War, sending Americans to kill and be killed in that horrible unjust war. "Almost 40,000 Americans died in action in Korea, and more than 100,000 were wounded...In all, some 5 million soldiers and civilians [mostly Koreans] lost their lives." If being sent to fight and die in an unjust war against a bogeyman enemy armed by one's own government is not being treated like dirt, then nothing is.
To Stop the Billionaires from Treating Us Like Dirt We Need to Remove them from Power, NOT Just Tax them a Bit More
The billionaires today treat us like dirt. Go here to read many examples of how they do this, and WHY they do it (it's to keep us in our place at the bottom of an unequal society based on class inequality.) By saying that he intends to tax the billionaires no more than they were taxed in the Eisenhower years, Bernie Sanders is admitting that he has no intention of preventing the billionaires from continuing to treat us like dirt.
The way to prevent the billionaires from treating us like dirt is to remove them from power. That means taking away their undeserved wealth. It means making our society one with no rich and no poor, so that there are no Jeff Bezoses or Bill Gateses with more wealth than other people. It means basing our economy on the egalitarian principle of "From each according to reasonable ability, to each according to need or reasonable desire with scarce things equitably rationed according to need" as discussed here and more broadly here.