The Mellon Plan

In 1923, Treasury Secretary Andrew Mellon, one of the richest men in America, presented Congress with the “Mellon Plan”. The first “trickle-down economics” proposal, it called for a reduction in income taxes where the top income brackets would have their taxes reduced from 77% to 24% and the lowest would have theirs’ reduced from 4% to 3%. He also proposed reducing the federal estate tax in the belief that corporations and wealthy individuals would shift their fortunes away from tax shelters and invest them in the economy.

Congress gradually enacted these tax cuts from 1921 to 1929. The Stock Market crashed in 1929.

What can we learn from that?