There’s a nice symmetry to the House Republican budgeteers’ idea of cutting the top tax rate for the very wealthy to 25 percent. The spending side of their budget would go a long way to giving us Herbert Hoover’s economy, so why not have their tax rate on the rich match Hoover’s? In fact, we haven’t had a top rate that low since Hoover lost his re-election bid to Franklin Roosevelt in 1932.
Of course, for those today with the very highest incomes, most of their income is taxed as capital gains, which for most of our history has gotten a special low rate. The rate now is 15 percent. It was 12.5 percent under Hoover. Rep. Paul Ryan (R-WI), the chief architect of the House plan, thinks it ought to be zero.
The rich liked Hoover, too. The middle class, or what was left of it after the Great Depression, not so much.
Michael Ettlinger is the Vice President for Economic Policy at American Progress.