America: a history lesson

Historian Eric Hobsbawn (quoted from memory):

“It is the job of the historian to remember what others have found it convenient to forget.”

Economist Thomas Piketty:

“From the 1930s until the 1970s, the US was at the forefront of an ambitious set of policies aiming to reduce social inequalities. Partly to avoid any resemblance with Old Europe, seen then as extremely unequal and contrary to the American democratic spirit, in the inter-war years the country invented a highly progressive income and estate tax and set up levels of fiscal progressiveness never used on our side of the Atlantic. From 1930 to 1980 – for half a century – the rate for the highest US income (over $1m per year) was on average 82%, with peaks of 91% from the 1940s to 1960s (from Roosevelt to Kennedy), and still as high as 70% during Reagan’s election in 1980.

“This policy in no way affected the strong growth of the post-war American economy, doubtless because there is not much point in paying super-managers $10m when $1m will do. The estate tax, which was equally progressive with rates applicable to the largest fortunes in the range of 70% to 80% for decades (the rate has almost never exceeded 30% to 40% in Germany or France), greatly reduced the concentration of American capital, without the destruction and wars which Europe had to face.”