Also in the 40s 50s & 60s you didn’t have a lot of 2-income families. As more and more women have entered the workplace, there are more workers paying taxes but wages are probably lower too. Laura correctly points out that we have a spending problem, mainly due to entitlements. If they were raising taxes to pay down the debt that would be one thing, but they just want more money for more handouts.
Ok, now I finally finished the clip you sent me, and I have to say I disagree with most of what Ben Steain said. That having been said, I have to say that he is correct that a low tax rate does not necessarilly mean there will be economic growth, but I have to qualify that.
I’ll use the term “Economic freedom.” Economic freedom (which includes less or no taxation), is what allows for an economic growth. A person, or society, must be industrious and have incentive to be industrious to be prosperous. So, if there is more taxation, there is less economic freedom because people cannot keep their money, and thus, an economic downturn. However, you can lower the tax rate to zero and still have no economic growth. This could be due to regulation or a number of other factors (resources, etc.). Increased regulation and control (permits, EPA nazi policies, denied leases, zoning, on and on) also stifle economic freedom. So, while I agree that a low tax rate is beneficial to economic growth, it is not the only factor.
Hence, with less regulation, or a sky high demand (as I mentioned in the mid 1900’s, we had the manufacturing base to cater to the world, and the demand to buy our goods—now neither is in our favor), we could still have growth amid high taxation. However, we have ZERO favorable conditions going for us at this time, so I agree that lowering the tax rate would not necessarily paint a better economic picture (frankly, the U.S. economy as it is is toast, because it’s only based on foreign subsidization of our gov.).
We have a whole mess of problems, and I can guarantee that a higher tax rate will solve none of them. What the U.S. needs is economic freedom, and that includes a lot less taxes. In other times, we may have been able to live with them, with other factors offsetting them, but right now we can’t afford ANYTHING stiffling what’s left of the sinking economy.