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[–] 60 points 1 day ago (2 children)

Nobody earned enough to be taxed in the top bracket. That was the entire point. To avoid that top bracket, businessmen lowered prices, or paid employees higher wages, or purchased tax deductible goods and services. What they didn't do was take additional profit, because the IRS would claim 91% of those profits. Everything the businessman did to avoid that punitive top tier was of great benefit to the economy.

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  • [–] 8 points 1 day ago (1 child)

    Businesses also plowed money back into their companies to make them bigger and thus employed more people.

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  • [–] 3 points 1 day ago*

    True, but this is actually the core of the underlying problem. They expanded their ability to extract profit from their customers and workers, while retaining ownership of that ability.

    With a 91% tax rate, the company would have a compelling reason to offer ownership shares rather than converting profits to capital. The kind of expansion you're talking about still occurred, but the workers owned it.

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