Thursday, July 10, 2008

The Truth About Tax Cuts

Updated 9/7/2010


A few facts about lower marginal tax rates which Dems would prefer you not know (click each image to learn more):

1) Lower marginal tax rates have not produced lower revenues.

In fact, dropping the marginal tax rate, by virtue of The Laffer Curve, slightly increased real tax revenues (meaning tax revenues as a percentage of GDP):

Click the image to learn more

2) Those who make the highest incomes (I’m not one) have continued to pay the vast majority of the taxes (even more so than before):

Click the image to enlarge
Click the image to enlarge
I personally created and uploaded the above chart.
The data used in the above chart are found in this spreadsheet downloaded from this page

Click the image to view the source
Click the image to view the source

Click the image to view the source
Click the image to view the source

3) In fact:

“The top 1 percent of income earners paid 40 percent of all federal income taxes in 2007, while the bottom 50 percent paid only 3 percent.”

Click the image to learn more

4) And best of all:

As the marginal tax rate has gone down, recessions have been shorter & less severe, expansions have been longer & better and the unemployment rate has steadily declined (providing the greatest benefit to the lowest income earners).

Click the image to enlarge it and view the source:
Click the image to enlarge it and view the source data

Note: In the above chart, the extended expansion and the associated decline in unemployment during the sixties was a function of JFK lowering the marginal tax rate from 91% to 70%.

Unfortunately, subsequent to JFK, LBJ burdened the economy with new taxes for Medicare and Medicaid, Nixon implemented idiotic wage and price controls, Ford didn’t do much of anything and Jimmy Carter did just about everything wrong. It was not until the Reagan years (and his dramatic tax cuts) that our economy rebounded from the compounded lunacy of LBJ, Nixon and Carter.

So, yes, despite what the propagandists in the media say, it is clearly in the best interest of all Americans that the Bush Tax Cuts be made permanent.

5 comments:

Nerdy Eddy said...

Good insight about the marginal tax thingy.

tri.bassett said...

Umm, dude? there is a word called CONTEXT... so the top 1% paid more in taxes under Bush.

Blinding glimpse of the obvious....

so please produce the chart where we see the tax increase on the 1% compared to WEALTH increase in this same 1%, and we'll even let you adjust that to real spending power...

Now do the same for the rest of your chart. We'll wait because we know big numbers confuse you...

Yeah, guess what... the top 1% get the benefit, while the bottom 99% get screwed...

and I AM one of the top 1%

SBVOR said...

Tri.Bassett,

I am a retired working stiff. I live on an annual budget which is less than the starting salary for an inner city school teacher. My income is derived from selling stocks which I scrimped and saved to purchase during my working life.

Since you apparently believe in the redistribution of wealth, I would be happy to sell you a copper penny on E-Bay. You can fund my PayPay account (from your trust fund?) in whatever amount you deem appropriate. I’ll start the bidding at $1,000.

Let me know when you’ve decided on an appropriate amount.

Or, you can join Warren Buffett in Limo-Liberal hypocrite land.

For my part, I don’t mind your sort becoming wealthier. I would, however, really object to Obama nearly doubling my own taxes starting with the very first dollar of my meager annual budget.

Crash said...

Good job collecting data here and thank you for citing sources. I have not yet decided whether I agree with your analysis, but I appreciate the way you presented it.

SBVOR said...

Crash,

What is important is that you examine the evidence and draw your own conclusions. Too few people ever bother to even examine the evidence. Kudos to you for doing that.

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