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):

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
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

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.”

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:

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.