THE TRUTH ABOUT TAXES: History Suggests High Tax Rates On Rich People Do Not Hurt The Economy

[xchrom]

http://www.businessinsider.com/history-of-tax-rates-2012-5



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This analysis revealed a lot of surprising conclusions, including the following:

Today's government spending levels are indeed too high, at least relative to the average level of tax revenue the government has generated over the past 60 years. Unless Americans are willing to radically increase the amount of taxes they pay relative to GDP, government spending must eventually be cut.

Today's income tax rates are strikingly low relative to the rates of the past century, especially for rich people. For most of the century, including some boom times, top-bracket income tax rates were much higher than they are today.

Contrary to what Republicans would have you believe, super-high tax rates on rich people do not appear to hurt the economy or make people lazy: During the 1950s and early 1960s, the top bracket income tax rate was over 90%--and the economy, middle-class, and stock market boomed.

Super-low tax rates on rich people also appear to be correlated with unsustainable sugar highs in the economy--brief, enjoyable booms followed by protracted busts. They also appear to be correlated with very high inequality. (For example, see the 1920s and now).
Periods of very low tax rates have been followed by periods with very high tax rates, and vice versa. So history suggests that tax rates will soon start going up.


Read more: http://www.businessinsider.com/history-of-tax-rates-2012-5#ixzz1u0EjogeT

[fascisthunter]

1. but it's not fair to tax the rich more.....

...according to those who don't realize those who become rich have done so by using our commons more than the average citizen. But hey... it isn't fair... riiiight.

[pampango]

2. Krugman has an article on how the right uses "personal incredulity" to get around pesky facts.

In Krugman's view the more complicated the issue (like how "something as intricate as an eye can evolve through random changes" or global warming or how high taxes on the rich does not hurt the economy) the more likely we are to discount facts and go with our gut feeling (or just ignore the facts and lie if one is a republican).

The right has been very effective in creating a fog around facts and urging people to use their emotions instead. "How many of you have every been hired by a poor person? The more money the rich have the more people they will hire? Seems logical doesn't it?" No facts; no evidence; just "logic" of a very right wing bent.

http://krugman.blogs.nytimes.com/2012/05/05/the-incredulity-problem/

[dkf]

3. Higher tax rates also don't correlate to higher revenue vs GDP.

http://blogs.marketwatch.com/fundmastery/2010/07/02/does-hiking-tax-rates-raise-more-revenue/

That is because higher tax rates change behavior.

Raising the top tax bracket to match spending at 25% of GDP is a pipe dream because no matter the top tax rate we've never gotten anywhere near 25%.

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205

[aquart]

4. No man should be so rich he has nothing left to buy but his government.

[PSPS]

5. Just the opposite. This country was at its economic zenith when the top marginal rate was 90%.

[sendero]

6. As my long running sitnature suggests..

.. if lowered taxes on the rich creates jobs, where are they?

Like of lot of economic dogma dished out by the right wing noise machine, the idea that low taxes on the rich create jobs is pure fiction.

Tax rates on the rich are the lowest in modern history, so we can lay that idiotic canard to rest once and for all.

There was a time when the formation of investment capital was a difficult issue and at that time lower taxes might have helped.

We have the opposite problem now, there is capital for investment everywhere (the rich have soaked up all the money) but there are few productive ways to invest that money.

That is one of the factors at the root of this entire debacle.

Taxes on the wealthy should be raised and raised significantly. That's not going to fix anything but it will sure help and fairness never really goes out of style.

[patrice]

8. "few productive ways to invest that money" . . . in the existing paradigm? i.e. capitalism?

Is it even really possible to get those manufacturing jobs back?

or - e.g. CAN American Information Technology be American again?

We have been hollowed out. How is it even possible to actually fix that? Isn't everything just a bandage, unless you change the fundamentals?

[Igel]

9. Consider the following.

Through the '50s and '60s, tax rates fell.

At the same time women started to hit the workforce in large numbers. Unemployment didn't skyrock. There were recessions, but overall the "structural" unemployment rate was about the same.

In the '80s tax rates fell. As we were coming out of a recession, one that didn't seem to producing jobs very quickly. Structural unemployment rate was again achieved.

Tax rates continued to fall slightly, overall. In the Clinton second term they increased, but stayed far below historic levels. "Structural unemployment," that number that hadn't been breached for decades, was squashed. Unemployment fell to near-record lows.

Bush recession was greeted with slightly lower taxes. It was a mild recession. Unemployment returned--gradually--to very low levels.

This is all post hoc. No causality is shown, just correlation. On the other hand, the counter-assumption seems to be that if tax rates are lowered then unemployment has to go low and stay low and the usual consequences of recessions have to be ignored. In fact, we had recessions with high tax rates and low tax rates, even with no income tax rates. The level of argumentation has to be higher, and in economic journals it is. But still there are some nasty assumptions that have to be made about the economy, consequences of changes to a very complex and chaotic system, about human nature and the role of culture and cultural changes in society. Until we nail those things down as iron-clad facts, there will always be competing assumptions and ultimately a lot of economics becomes models that predict the past and, only if the assumptions are right, the future.

[patrice]

7. Something that has ALWAYS puzzled me about Trickle Down:

WHY do perfectly "sane" people think the 10% are going to spend that money we are putting in their pockets on what they SHOULD spend it on WITHOUT SOMEKIND OF CONTRACT???

Wouldn't the "good business" community be THE FIRST to say "Get it in writing"??? We're just giving them OUR MONEY - by financing their free ride on resources that WE pay for - and we don't get what we expect in return for our investment locked in legally somehow??? How fucking STUPID is that?

It's very telling that one of the first principles of good business is completely IGNORED by these fucking Tories who are in Congress.