“Like Cohn, Mellon entered Washington as a key player in a Republican administration taking power after eight years with a Democrat in the White House. Mellon’s Democrat, Woodrow Wilson, had signed into law the first income tax in modern American history—and then let Congress hike the top marginal rate north of 70%.
Such high rates, Mellon argued, made it impossible for businesses to productively invest. Lower rates, he pronounced, would benefit everyone. It took until 1926, but Mellon finally overwhelmed his opposition and shoved the top tax rate all the way down to 25%.
Mellon’s tax cuts on the rich did not usher in broad prosperity. They ushered instead exactly what Fiorello LaGuardia, then a progressive Republican member of Congress, had predicted: an ‘accumulation of enormous fortunes’ that distorted the economy and ultimately left it in shambles.”