While reading a paper written by one of my students, I was reminded of a string of statistics in Robert Brenner’s Economics of Global Turbulence:
By the Economic Recovery Act of 1981, taxes on individuals were cut by 20 per cent over three years, with the top bracket on unearned income–rents and interest–reduced from 70 per cent to 50 per cent. The Tax Reform Act of 1986 further reduced that rate to 28 per cent. The capital gains tax, which had already been reduced from 49 per cent to 28 per cent under Carter in 1978, was slashed to 20 per cent. By contrast, the social security tax, which falls disproportionately on working-class families, was increased by about 25 per cent over the course of the decade (R Brenner, The economics of global turbulence, 2006, 211).
And, of course, who can forget how corporations and investors plowed those savings back into the US economy, creating a sea of high wage, high benefit jobs?