THE BEST IS YET TO COME
worked miracles, and we’re a lot better off as a result. Today, retail price competition is the standard, and consumers are the winners. Airlines and trucking were deregulated under President Jimmy Carter and championed by Senator Ted Kennedy, if you can believe it. Forty years later, real airline prices have dropped by half, and Americans travel by air five times more frequently. To boot, the reduction in airline prices has not come at the cost of safety, reduced wages, or lower customer satisfaction. And if you think air travel is better, just look at what Uber and Lyft are doing to make taxi prices and services better... Wow! Zillow, Hospitals, and Alexa On May 1, 1975, the 183-year era of fixed commissions for stock transactions ended. Negotiated commissions on Wall Street brought commissions for buying and selling a share of stock in a company from 20 cents to way less than a penny. Due to the deregulation, barriers to enter the market were torn down, allowing many more households to invest in the stock market. Only around 15% of households had some degree of exposure to equities in 1975. Three decades later, this figure would skyrocket to around 50%. Now, it’s almost the industry standard to have zero-commission trading. Soon the brokerage industry for stock traders will be emulated by real estate brokering firms. Zillow is the future... After some 40 years of literal stagnation, real
Taxes, Walmart, and Uber
In 1946, the highest federal marginal income tax rate was 94%. That’s right, 94%! Imagine the debates in Congress that had to approve such a number. The Conservatives argued that 94% was okay, but 98% would be “gouging.” All the while, their Liberal counterparts argued that 90% would be a giveaway to the fat-cat richies. President Harry Truman actually signed that legislation into law. Today, the highest federal personal income tax rate is 37% and had fallen to a low of 28% under President Reagan. The same pattern applies to the corporate tax rate, which is now at its lowest level (21%) in a century. In 1976, only one state, Nevada, did not have a state estate tax. Today, 32 states have no estate tax, including California where the inheritance tax was eliminated in June 1982 by a vote of the people (62% support). The state inventory tax has also all but vanished in the U.S. In 1946, there were only two states that allowed workers to choose if they wanted to belong to a union (the right to work) – Arkansas and Florida. Today, more than half of all states are right-to-work states, including Michigan and Wisconsin if you can believe that. In fact, the percentage of union workers in the U.S. has tumbled. In the 1950s and 1960s, it was against the law for any store to sell products at a discount below the manufacturer’s suggested retail price (“MSRP”). There was no Walmart, Costco, or Home Depot. Deregulation
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November 2020
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