History shows higher taxes lower debt

As bad as the U.S. debt is today (nearly 100 percent of gross domestic product), it was actually worse at the end of World War II when it was 120 percent of GDP. This huge debt was because of the financing of the war and the New Deal programs which put Americans back to work. This government stimulus ended the Great Depression. So we should expect a large debt in dealing with today's economic crisis.

But rather than making drastic cuts in federal programs at the end of World War II, our leaders introduced two important spending programs - the Marshall Plan for Europe and the GI Bill for returning service personnel. At 5 percent of GDP, the Marshall Plan expense corresponds to about $700 billion today. The GI Bill paid for the education and training of around 8 million young people.

Meanwhile, the U.S. debt decreased to

35 percent of GDP by 1975. How? Quite simply, the top tax rate ranged between 90 percent and 70 percent during those 30 years.

When the

Reagan administration lowered that rate to

50 percent in 1981 and then 33 percent in 1988, the debt went back up to nearly 70 percent by 1990.

The United Nations ranks the countries of the world according to the “well-being” of the citizens (Norway ranks first and the United States ranks 10th), and among the top 20 countries, we have the lowest ratio of tax revenue to GDP.

Clearly, we should raise taxes on the wealthy and not cut programs for the needy.

Harlan Graber

Bertram