Congratulations to the students of Washington and Lee University for conducting a wonderful convention this past weekend. The parade was outstanding, the debate was entertaining and the speakers were - well politicians.
My favorite speaker was Eric Cantor. He told a wonderful story about the America that his grandmother grew up in. An America where anyone could succeed and in a mere two generations rise up from poverty to majority leader in the house of representatives. Quite an impressive journey for the Cantor family. He then went on to tell the audience that he knows how to restore the America of his grandmother - you guessed it - tax cuts.
Consider, the current highest marginal tax rate on earned income in the United States stands at 35% in 2012. The marginal tax rate on long term capital gains is even lower at 15%.
I did a little investigating and determined that Mr. Cantor's grandmother was of working age during the 1930s, 40s and 50s, much like my family. Here are the numbers for the highest marginal tax rates during that time period.
I include the 1960s and 1970s to include a time period when Mr. Cantor's parents and my parents were hard at work raising families.
Mr Cantor tells a compelling story about the tax burden and the death of the American Dream, but what do the numbers say? They tell a very different story. They tell a story of an incredibly productive America during a time period of, may I say, absurdly high taxes.
Lowering taxes for the highest earners will not return us to prosperity and raising taxes on the highest earners will not destroy the American dream. In fact, Mr. Cantor's grandmother and parents prospered in an America with extremely high taxes of the highest earners and look where Mr. Cantor is today.