America Was Great When Taxes Were High on Corporate Executives — What Happened? Part I
“The big lesson is that the period of maximum prosperity of the U.S. economy in the middle of the century was a period where you had a top income-tax rate of 90 percent.”
- Thomas Piketty
When Trump says he wants to make America great again his followers believe he means a return to the time when the average working class family could easily afford a house. Perhaps he means the part of that time before advances by the civil rights and gay rights movements which would make Eisenhower’s tax policies seem ideal? At that time the high personal income tax rate was 90%; and the corporate rate was 52% (Tax Foundation, Aug 15, 2025).
But the wealthy did not flee during this period of high taxation as they threaten to do now[1].
Who Are These High-Income Earners?
They are the corporate CEOs like Brian Nichols of Starbucks who took home $95.8 million in 2024 while the Starbucks median worker pay was an unliveable $14,674 — a 666,000 to 1 ratio (Kessel, Sept. 11, 2025). That worker pay check is almost $1,000 less than the federal poverty level for an individual in 2025 (Hayes, Jan. 27, 2025).
They are also the corporate executives whose pay that Thomas Piketty identified as being the major cause of economic inequality in his best-selling book, Capitalism in the 21st-century.
There is no justification for a low tax rate for the executives. Even if the tax cuts for corporations created jobs (which they do not), no tax cut for individuals benefits anyone other than wanna be billionaires.
The public has been outraged at the excessive executive pay, but all attempts to reduce it beginning with Clinton and 1993 have failed utterly and they will continue to fail. For the reason see: CEO Pay Explodes Again: Why All Attempts To Stop It Have Failed (Weir, Ap. 27, 2022)
These failed attempts were centred on taxing the corporation. However, the amounts proposed are a small percentage that may add to a government’s revenue but will not assist workers. The only remedy is to tax the executives directly as was done until Reagan. That means raise individual high end income tax rates. Use that money to provide assistance to workers like universal healthcare as every other developed nation has provided to their workers for over 100 years. What a relief for US workers if there was no more medical debt as with their compatriots in other countries.
The Decline of Sharing Prosperity
The graph below by Emmanuel Saez and the Economic Policy Institute shows that a better, sharing of prosperity began one year before the beginning of World War II (1941) and lasted until the 1980s. This period occurred when taxes on the rich were above 70%. And when they were reduced by Reagan, that sharing of prosperity began to decline.
At that point a slow undetectable rise in inequality began. It was like the frog who is subjected to very low temperatures at the beginning and doesn’t realize it’s about to be boiled until it’s too late.
But this evidence never gets to the public. People still believe in Regan’s trickle-down fantasy. That is the fault of the elite who control the Democratic Party and want lower tax rates for themselves and their political donors. They have largely adopted Regan’s deception that low taxes on the rich are a benefit to the poor. As for Biden, he left the Trump tax cuts in place.
Based on the evidence, a key MAGA point, should be to restore high taxes on the rich again.
Next, the Trump Tax cuts in 2017 did not go to job creation and where they went.
[1] For a summary of research debunking the myth of the flight of the wealthy see Patriotic Millionaires, July 24, 2025 https://patrioticmillionaires.org/perspectives/millionaires-wont-leave-if-you-tax-them/
Acknowledgement: Image by Freepik: <a href=”https://www.freepik.com/free-ai-image/adult-with-loths-money_262772272.htm#fromView=search&page=1&position=3&uuid=12b9133a-a502-4bde-ac19-1b219414aba3&query=wealthy+person">Image by freepik</a>
