At his Hollywood height, actor Ronnie Reagan was making $400,000 per picture. With the top federal tax rate over 90 percent, Reagan used to tell his White House chief of staff Donald Regan, he always chose to “loaf” around rather than make more than two pictures a year. “Why should I have done a third picture, even if it was Gone with the Wind?” Regan remembers Reagan asking. “What good would it have done me?”
For starters, even at that top 90% tax bracket, making a third picture would have still earned Reagan an additional $40,000 a year. At the time that amount would have been roughly 10 times the annual household income for most working Americans. It’s certainly doubtful whether any of the acting parts that Reagan passed up would have earned him an Academy Award… but it still makes you wonder. Our 40th President was clearly aware of his limits, at least when it came to the movies.
As far as the concept of ‘job creation’ goes, Ron Reagan’s decision to “loaf” around, rather than do more acting work, certainly didn’t cost anyone a job. If anything that 90% tax rate ultimately resulted in at least 2 or 3 choice acting roles being offered to others each year
The truth is I probably wouldn’t even be bringing up the recollections of a moderately successful Hollywood actor, had he not gone on to affect the country in the most profound ways imaginable, many of which are still being felt today. Talk about the worst possible example. Tell me that Albert Pujols won’t perform as well if his taxes are raised. I’m sure that Lady Gaga will work equally as hard on all her music, even after she realizes that the second ‘hit’ will only bring her an extra $1,000,000.
I’m also quite certain that, once faced with the reality of making only a few million dollars take home pay each year, very few of the people currently working on Wall Street will actually decide to give up their jobs and take up landscaping or teaching. Like most of the people who actually work in restaurants, they will continue leaving 35% tips. They also won’t start ‘killing what they eat’. That’s a specialized skill that even most chefs today wouldn’t be capable of performing properly… let alone a Wall Street executive looking for a career change.