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New York Sun: Gold standard accompanied boom era's high marginal tax rates

Section: Daily Dispatches

A GOP-Democrat Deal for the Coming Campaign

From The New York Sun
Wednesday, January 30, 2019

As the radicals rally for a return to policies designed to tax -- even confiscate -- the wealth of the richest Americans, The New York Sun is prepared to offer a deal. We'll join Congresswoman Alexandria Ocasio-Cortez in her 70 percent tax rate or Sen. Elizabeth Warren in her call for a levy on the super-rich if they'll join The New York Sun in its call for a return to the gold standard.

We know, we know. Not going to happen. That doesn't mean it's not logical. What ignites our rashness is the latest column from the New York Times' Nobel laureate, Paul Krugman. He endorses Senator Warren's proposal to, as Mr. Krugman puts it, "impose a 2 percent annual tax on an individual household's net worth in excess of $50 million, and an additional 1 percent on wealth in excess of $1 billion."

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Mr. Krugman reckons that would up the average tax on the top 0.01 to 57 percent. "Those are high numbers, although they're roughly comparable to average tax rates in the 1950s," Mr. Krugman writes. That's only the latest of the columnist's patented paeans to the Eisenhower years. ...

It was, in our view, precisely a restoration of a gold standard that actually set the stage for the expansion of the 1950s. This was done at Bretton Woods, New Hampshire, at the end of World War II. It wasn't a purist's gold standard. It did, though, arrange the world's monetary system around a promise by America to redeem in gold -- at a 35th of an ounce -- dollars presented by foreign governments.

What an economy that promise produced. ...

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