Its always bothered me that bush's two wars are being fought while CUTTING taxes. I assumed he was the first to do this, but from what I've dug up it was a trend started during the Vietnam war (and continued by Bush Sr.).

The source for this data is here:
History of Federal Individual Income Bottom and Top Bracket Rates

Caveats: Its always worth considering the 'cutoff' which on the chart is "Taxable income over" which is more favorable to rich folks if that is a BIGGER number.

For the poorest folks, they're better off if the "Taxable income up to" number is smaller.

For in-between folks (i.e. the middle class), its often hard to tell whether a tax bracket change is better or worse when the cut-off ALSO changes.

Lets compare that chart with all significant wars (disregard Greneda and Panama, etc). I'm only including the years in which the US was significantly involved (since we tend to get involved later in the game). The first Gulf war was sort-of an in-between case ... it was certainly a major military effort, but it was over so fast (~7 months) its hard to say whether it affected tax rates. I didn't consider efforts that were smaller in scope than the First Gulf War.

From the link above, the Top tax bracket was (average)
72% --- WWI (1917-18)
92% --- WWII (1942-45) <--- Dec 7, 1941 I know
91% --- Korean war (1950-53)
71.5% --- Vietnam War (1965-1973) <--- heavy involvement period
28% --- First Gulf War (1990)
36% --- Afghanistan war (2001 - present)
35% ---Iraq war (2003 - present)

Now to prevent this from being too misleading, lets compare this with a rough average of tax rates a few years before each war and a few years after each war

56% Era after WWI (since before is very skewed due to income tax being new)
81% Era before and after WWII (averaged)
87% Era before and after Korean war (averaged)
78% Era before and after Vietnam war (averaged)
34% Era before and after First Gulf war (averaged)
40% Era before Afghanistan and Iraq war (averaged)

So lets look at how much the top tax bracket went up for each war ... i.e. the 'top tax bracket cost' of each war.

16% WWI
11% WWII
4% Korean War
-6.5% Vietnam war <--- note the negative sign
-6% First Gulf War <--- another negative sign
-4% Afghanistan war <--- another negative sign
-5% Iraq war <--- another negative sign


I find this interesting that taxes for our last four wars have GONE DOWN during wartime. I'm not sure what this means specifically, other than there's a reason our debt keeps going up more and more, and fundamentally taxes in - benefits & expenses out + debt = 0. Wartime increases expenses, so if you CUT taxes its hard to see how debt cannot climb.

I'm curious whether people think we should revert to the old-school mode of WWII where every american family makes daily sacrifices (sugar rationing, rubber shortages, etc) to pay for the war we find ourselves in (or 2 wars as is currently the case)? To me, it seems dumb to be spending a ~trillion dollars extra without PAYING for it.

As sort of a second topic to this data, consider why Reaganomics appears to have worked so well. Reagan changed a 70% tax bracket to a 50% tax bracket. That was a HUGE amount of money freed up. He also had the benefit of capital gains rates dropping from 28% to 20%.

Contrast that to Bush who cut a a 40% rate to 36%, but the capital gains rates were also at historical lows to begin with -- 15%. So bush's tax cuts for the wealthy didn't really free up much capital and arguably starved the government of important revenue. I'm not aware of anyone showing that Reaganomics worked for bush's tax cuts.

http://en.wikipedia.org/wiki/Capital..._United_States