<p>But the tax is much simpler, I don’t have to save receipts for lots of things.</p>
<p>@notrichenough- nothing was indexed to inflation back then - not the numerous tax brackets that existed back then or the amount for personal exemptions or the standard deduction.</p>
<p>When inflation started to heat up in the 1970s (in 5 of the 8 years between 1974 and 1981 inflation exceeded 9.0%), the resulting “bracket creep” pushed many middle class taxpayers into tax brackets that were originally intended only for the wealthy.</p>
<p>What we need is a chart that shows how much tax people pay in each income group over the course of years. Lay it on top of income or asset holdings to see if there’s any correlation. I’ve seen a graph how the wealth of each quintile evoled over the years. It showed the divergence beginning late 80’s or early 90’s. Just looking at isolated changes in tax law may not be representative of how the tax law affects different income group. It is true kiddie tax was instituted but the exemption to estate tax was also raised from $650K for example. In net, they may be paying less tax.</p>
<p>As has been said before, when doing a comparison of incomes what should be looked at is after tax income adjusted for income transfers; otherwise you are not taking into account government actions that decrease income inequality and you are not looking at the correct figures to make a real comparison of what people’s income really is.</p>
<p>I am not saying it wasn’t the right change. They also got rid oftax advantage of generation skipping trust. I think it was. Just that the real wealthy would have come up with something else and in practice their tax burden may not have changed.</p>
<p>didinator, the trouble is I am not sure how credible those data are. Better measure will be looking at the accumulated wealth. If the wealthy are heavily taxed it would be harder for them to accumulate their wealth.</p>
<p>FICA back then was a small fraction of what it is today.</p>
<p>Isn’t FICA mostly paid by the middle class? We increased burden on middle class. </p>
<p>Define middle class, people make around $50K? if the answer is yes, then it’s not just for the middle class.</p>
<p>^^. FICA is a very regressive tax. As a portion of income, it is felt most by those making the least. The middle class feels it less than the poor, but more than the well-to-do. </p>
<p>I am embarrassed that my reading of the book ground to a halt this summer, but I will resume when HS restarts:</p>
<p>
</p>
<p>Well I don’t envy Europe now, I better not read that book. :D</p>
<p>lxnayBob, thank you for bringing up Picketty. It was a best seller for a while. The minority of uber wealthy will also influence poilicies made at the top to benefit themselves. It becomes a vicious cycle. I think we are seeing some of it already? When I visited DC in the early 80’s it was a desolate town. I don’t think many young people were interested in going there particularly. Georgetown area was vibrant but otherwise, it was pretty sleepy. It is so different now. I think it’s the money pouring into politics that brought on the change. Scary.</p>
<p>@Iglooo, I think a lot of self-dealing has taken place, and continues to accelerate. In my view, it is unconscionable that the US allows “carried interest” in the tax code for hedge fund workers. Even at the top, there is a great divide between the “W2 income but well off” and those whose capital and connections are doing the heavy lifting. I am not griping; we are more comfortable than I ever thought possible, but I worry that it will be even less meritocratic for my kids. </p>
<p>Btw, I was in DC until the early 80s. It was less crowded and hectic than today, but it wasn’t all that sleepy in the Adams Morgan area, Kalorama Triangle, up near the zoo, further up Connecticut Ave, etc. From what I’ve heard, I have no desire to go back 
</p>
<p>We had a friend in Georgetown. i was an accidental visitor to DC, no in-depth understanding, I admit. Going from a museum to another in town, I thought it looked so much like Wall Street after hours. I also thought that represented how deceltralized the US was compared to France for example. It was more like Bonn.</p>
<p>I share your worry about next generation. My kid will have enough but I’d think she’d rather live in a society that rewards what we value, hard work, honesty, innovation, talent, not back-room deals.</p>
<p>I agree that society should reward hardwork, etc… over backroom deals. But I rather live in a society where you go from welfare recipient to billionaires overnight like the WhatsApp guy.
Even if there is a sliver of hope for my kids, I would rather have that small sliver of hope than none.</p>
<p>DrGoogle, I have a feeling your kids are going to do just fine.</p>
<p>
With respect, that’s what I consider “lottery thinking.” There’s nothing wrong with winning the lottery, but it’s a losing strategy to wait for it. </p>
<p>My father at the age of 50 came to the US not speaking English, no money, with kids and another on the way. He mopped the halls and stairways to get a rent reduction in our tenement. He worked hard, moved to the suburbs, and eventually put his kids through college (full pay) and retired comfortably but not extravagantly. </p>
<p>That’s difficult to do today. </p>
<p>Korean Americsns have been very successful. But they work their butts off, and not many people are willing to work that hard.</p>
<p>Are the people who are becoming pilots today lazier than those who became pilots 30 years ago?</p>
<p>No I think they’re the same. Probably smarter and more well educated, though. So competitive that the minimum qualifications have increased. Same level of work, though, I’d guess, hasn’t changed.</p>