At the recent World Economic Forum in Davos, Switzerland, a panel moderator asked Michael Dell, America’s 17th-richest man, what he thought about the idea of raising the top marginal tax rate to 70 percent.
This idea has been in the headlines since Rep. Alexandria Ocasio-Cortez floated it in a 60 Minutes interview on January 6 as a way to pay for a Green New Deal.
The Davos panel found the question hilarious. When the laughing died down, Dell, the founder and CEO of Dell Technologies, dismissed the idea out of hand, claiming it would harm U.S. economic growth.
“Name a country where that has worked, ever,” the mega-billionaire said.
Dell knows a lot about computers, but he doesn’t seem to know much about history. Otherwise he’d know that one country where such a top marginal tax rate that high — and even higher — has worked is the United States.
Back in the 1960s, our top marginal tax rate ranged from 70 percent to 91 percent. That was also the decade when our country had its highest average economic growth rate.
More importantly, it was an era when workers generally shared in the country’s prosperity. Since the 1970s, wages for most U.S. workers have flatlined, even as productivity has steadily increased. But back in the 1950s and 1960s, wage growth kept pace with productivity.