The Soak-the-Rich Catch-22
http://online.wsj.com/article/SB10001424052748703977004575393882112674598.html?mod=googlenews_wsj
Anyone who is familiar with the historical data available from the IRS knows full well that raising income tax rates on the top 1% of income earners will most likely reduce the direct tax receipts from the now higher taxed income—even without considering the secondary tax revenue effects, all of which will be negative. And who on Earth wants higher tax rates on anyone if it means larger deficits?
As a result of higher tax rates on those people in the highest tax brackets, there will be less employment, output, sales, profits and capital gains—all leading to lower payrolls and lower total tax receipts. There will also be higher unemployment, poverty and lower incomes, all of which require more government spending. It's a Catch-22.
Higher tax rates on the rich create the very poverty and unemployment that is used to justify their presence. It is a vicious cycle that well-trained economists should know to avoid.
Yup
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Wait...., what...., no!
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Correct, the Bush tax cuts were fine as long as he cut spending, but if only someone would have directed him towards the Laffer Curve. Just look at Sen. John Kerry's recent yacht brouhaha if you don't believe me. He bought and housed his $7 million yacht in Rhode Island instead of Massachusetts, where he is the senior senator and champion of higher taxes on the rich, avoiding some $437,500 in state sales tax and an annual excise tax of about $70,000. Those Democrats love paying taxes. And then there's the Hoover/Roosevelt Great Depression. The Great Depression was precipitated by President Hoover in early 1930, when he signed into law the largest ever U.S. tax increase on traded products—the Smoot-Hawley Tariff. President Hoover then thought it would be clever to try to tax America into prosperity. Using many of the same arguments that Barack Obama, Nancy Pelosi and Harry Reid are using today, President Hoover raised the highest personal income tax rate to 63% from 24% on Jan. 1, 1932. He raised many other taxes as well. Side: Yup
"The Great Depression was precipitated by President Hoover in early 1930, when he signed into law the largest ever U.S. tax increase on traded products—the Smoot-Hawley Tariff." Well, important to correct, it was a tariff, not a tax. Tariff's raise the duties on imports, which dissuades foreign companies from selling into the country. The tax is what is paid by the domestic citizens to the government. The tariff is paid by foreign investors. As such, tariff's are not meant to raise revenue directly, but rather foster industrial and agricultural production. (http://eh.net/encyclopedia/article/ "President Hoover raised the highest personal income tax rate to 63% from 24% on Jan. 1, 1932." Citing information without a historical context is dangerous. Indeed, he had raised taxes on the highest tier in America to 63%. However, previously he had slashed taxes (to the highest earners) from 73% to 24% just before the Great Depression. When his tax cut failed and an enormous deficit burdened the economy, Congress (not Hoover) then raised taxes to 63% (for the top earners). Here's the entire episode: "Prior to the start of the Great Depression, Hoover's first Treasury Secretary, Andrew Mellon, proposed and saw enacted, numerous tax cuts, which cut the top income tax rate from 73% to 24%. When combined with the sharp decline in incomes during the early depression, the result was a serious deficit in the federal budget. Congress, desperate to increase federal revenue, enacted the Revenue Act of 1932, which was the largest peacetime tax increase in history.[48]. The Act increased taxes across the board, so that top earners were taxed at 63% on their net income. The 1932 Act also increased the tax on the net income of corporations from 12% to 13.75%." It would be improper to claim that Hoover, who believed in minimal (if any) government interference with the economy (at least until close to the end of his presidency), is comparable to the current President, Speaker of the House, and Senate Majority Leader. Trickle-down economics never really worked. "Reaganomics" caused the federal deficit to almost triple and the Bush tax cuts helped spur on the greatest recession since the Great Depression. Why one refuses to learn from history is beyond me. (P.S. A good article to read on supply-side economics: http://www.nytimes.com/2010/07/16/ Side: Wait...., what...., no!
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Thanks for the definition of a tariff is. It was a typo. Whatever, Congress raised the taxes, but Hoover did sign it unless someone else did. Well, if only Hoover and his administration knew about the Laffer Curve because it was discovered until 1970, then they would have never cut taxes being on the downward slope of the curve instead of being on the backward slope of the curve. Trickle-down economics never really worked. "Reaganomics" caused the federal deficit to almost triple and the Bush tax cuts helped spur on the greatest recession since the Great Depression. Why one refuses to learn from history is beyond me. President John F Kennedy supply side tax cuts worked. Bush tax cuts would have worked if he would have cut spending according to the Laffer Curve. If one people would learn history is beyond me, too. Side: Yup
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USA Today even reports it, more welfare recipients as a good thing for Obama. Side: Yup
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