Posted on 09/17/2012 3:18:11 PM PDT by jazusamo
There was a time when Democrats and Republicans alike could talk sense about tax rates, in terms of what is best for the economy, without demagoguery about "tax cuts for the rich."
Democratic presidents Woodrow Wilson and John F. Kennedy spoke plainly about the fact that higher tax rates on individuals and businesses did not automatically translate into higher tax revenues for the government. Beyond some point, high tax rates on those with high incomes simply led to those incomes being invested in tax-free bonds, with the revenue from those bonds being completely lost to the government — and the investments lost to the economy.
As President John F. Kennedy put it, "it is a paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now." This was because investors' "efforts to avoid tax liabilities" make "certain types of less productive activity more profitable than more valuable undertakings," and this in turn "inhibits our growth and efficiency."
Both Democratic president Woodrow Wilson and Republican presidents Calvin Coolidge, Ronald Reagan and George W. Bush said virtually the same thing.
This disconnect between higher tax rates and higher tax revenues is not peculiar to the United States. Iceland and India both collected more tax revenue after tax rates were cut. In Iceland the corporate tax rate was cut from 45 percent to 18 percent between 1991 and 2001 — and the revenue from corporate taxes tripled at the lower rate.
(Excerpt) Read more at creators.com ...
Wealth equals Net Worth
Income equals Net Work
Do we really want to tax work??
Icelandic economic policies were cool indeed!
” Iceland and India both collected more tax revenue after tax rates were cut. In Iceland the corporate tax rate was cut from 45 percent to 18 percent between 1991 and 2001 — and the revenue from corporate taxes tripled at the lower rate.”
add to this list Singapore, Malaysia, Austria, and Hong Kong All boomed after the cuts. Many others. The formula of tax cuts to increase revenue has never failed anywhere in the world in the last 50 years.
Seems it works around the world and that's good, if the libs would only learn that :)
” if the libs would only learn that :) “
I think many, if not most do. Problem is, libs are LIARS
and, just like Islam, they believe it’s okay to lie for the cause. The cause being class warfare to win elections.
Don't let them fool you. Libs and progressives (at least the ones at the top) understand this all too well. Why do you think Husein extended the Bush era tax rates after 2010 when he still had majorities in both houses? He knew it was stupid to raise rates during a recession (he said as much) , especially since he needed to get 0bama care passed. Had the economy slowed any more than it was at the time he may not have gotten it through.
One of Soetoro's heroes from history, Josef Stalin would let the peasants keep more of their crops grown on private land when he needed food for the war effort. It's the same principle.
Does anyone here actually think that taxation, at this point , is about “revenue raising?!!!!!
It’s about Freedom.. And making, you , you peasant and peon, understand your place in the world
Does anyone here actually think that taxation, at this point , is about “revenue raising?!!!!!
It’s about Freedom.. And making, you , you peasant and peon, understand your place in the world
Another good one from Dr. Sowell. Thanks for the ping jaz.
This has been common knowledge for many years now.
But confiscatory taxation keeps the peasants in line while it destroys the economy, which is O’ooboo’s goal for our country.
Not only what you said, but libtards get a twofer by redirecting investor dollars from productive enterprises which produce employment to tax-exempt government boondoogles which line the pockets of the ruling class.
Zactly!
And rich leftists fund leftist campaigns. It’s a vicious circle, vicious to us that is.
All this talk about tinkering with the current system only detracts from the fact that the whole system needs to be scraped and replaced.
At what point do you reach the stage where additional tax cuts don’t result in additional revenue?
b) the common sense answer - when it is not worth the effort of taxpayers to change their behavior because of tax rates. If tax rates are at 3%, and increased to 4%, increase in tax rates result in increased taxes collected - and vice versa. On the other hand, if tax rates rise from 25% to 30%, people holding bonds may switch to tax exempt municipal bonds, resulting in lower taxes paid (and vice versa). In 1917, the first year of the income tax, the IRS reported several thousand people with incomes of over $1 million; during the following year, most of these people switched their investments to tax exempt municipal bonds, so a mere 300 reported million dollar incomes.
Politicians do not believe this in spite of outrageous examples. Congress passed the so called “luxury tax” of 10% on the purchase of autos over $50K, jewelry, yachts, etc. People changed their behavior - bought jewelry and yachts in europe, didn’t buy luxury autos — it killed the US boat building industry, crippled the jewelry stores, and resulted in much less taxes paid than it cost to set up the bureaucracy to collect the tax; and increased spending on unemployment insurance for boat workers. Congress quietly repealed the tax the following year.
The very next year, New Jersey passed a tax surcharge on the sale of commercial trucks to fill a hole in their budget. The result: almost no new trucks were sold in New Jersey - the sales moved to Pennsylvania; so the normal sales tax on trucks dried up to zero; and the registration fees also moved to Pennsylvania, resulting in a significant reduction in tax income to New Jersey.
There is another economic law (I forget it’s name) that says US tax collections will never exceed 19% of GDP - no matter what politicians do, no matter how they manipulate the tax code, people will just change their behavior to avoid additional tax collections.
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