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It's been tried much more than twice. And it's been done with success. For example, Kennedy in 1964 was very successful. See http://www.heritage.org/Research/R

It's been tried much more than twice. And it's been done with success. For example, Kennedy in 1964 was very successful. See http://www.heritage.org/Research/Reports/2003/08/The-Historical-Lessons-of-Lower-Tax-Rates http://www.heritage.org/Research/Reports/2003/08/The-Histori... And also http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.h... : High marginal tax rates discourage work effort, saving, and investment, and promote tax avoidance and tax evasion. A reduction in high marginal tax rates would boost long term economic growth, and reduce the attractiveness of tax shelters and other forms of tax avoidance. The economic benefits of ERTA were summarized by President Clinton's Council of Economic Advisers in 1994: "It is undeniable that the sharp reduction in taxes in the early 1980s was a strong impetus to economic growth." Unfortunately, the Council could not bring itself to acknowledge the counterproductive effects high marginal tax rates can have upon taxpayer behavior and tax avoidance activities. Since 1984 the JEC has provided factual information about the impact of the tax cuts of the 1980s. For example, for many years the JEC has published IRS data on federal tax payments of the top 1 percent, top 5 percent, top 10 percent, and other taxpayers. These data show that after the high marginal tax rates of 1981 were cut, tax payments and the share of the tax burden borne by the top 1 percent climbed sharply. For example, in 1981 the top 1 percent paid 17.6 percent of all personal income taxes, but by 1988 their share had jumped to 27.5 percent, a 10 percentage point increase. The graph below illustrates changes in the tax burden during this period. Indeed, I'd like to see your evidence that it's bad. That evidence should be clear, in that it shows that the problem is not actually government over-spending or other issues.

jbooth 16y ago
quote: tax payments and the share of the tax burden borne by the top 1 percent climbed sharply This is the reason for that phrase lies, damned lies and statistics. The top 1 percent have been getting an ever-increasing share of gross national income, so their share of gross national taxed income, hence gross tax take, correspondingly went up. Meanwhile, we're staring at a total meltdown on the demand side of the equation -- people who aren't in that top tier have seen their real wages fall consistently since the 1980s. What happens to a consumer economy when you've starved all the consumers? I'm not saying that the tax code created that upward aggregation - technology, globalization and outsourcing labor are probably the biggest factors in that order. But it seems like a solution addressing the exact opposite of the problem.
- yummyfajitas 16y ago
  ...people who aren't in that top tier have seen their real wages fall consistently since the 1980s. This claim doesn't pass the smell test. Can you name a single good or service (note: not a category of goods/services) which is less available today than it was in the 80's? If not, then real wages (i.e., wages measured in terms of the amount of stuff they can buy) have not gone down.
  - jbooth 16y ago
    I know you know the definition of real wages, and it's nothing to do with what you said -- it's wages indexed by BLS inflation numbers. http://en.wikipedia.org/wiki/File:United_States_Income_Distribution_1967-2003.svg http://en.wikipedia.org/wiki/File:United_States_Income_Distr... I overspoke. They've stagnated for the bottom 4 quintiles since the early 80s, and declined since 2000. For future trends, I'd extrapolate from the current U-3 and more importantly U-6 figures (they don't look good).
    - yummyfajitas 16y ago
      In general, the definition of economic concepts does not include references to specific government agencies. Are "real wages" not a meaningful concept in Mexico, beyond the reach of the BLS? If you look at the definition of inflation (keep track of units!), you can immediately see that wages indexed by inflation == amount of stuff you can buy. As for BLS inflation numbers, I agree that by that specific measurement, real wages appear to have stagnated. On the other hand, people today have more stuff than they did in the 80's. That suggests the BLS inflation numbers might not mean what you think they mean. (It's actually pretty clear why they don't quite match up if you look closely at the methodology of the BLS. The basket of goods used to compute inflation today is larger than the basket of goods in 1980. A proper measure of inflation would take a fixed basket of goods at t[0] and measure the cost of the same basket of goods at t[1]. But that would require different inflation measures based on the starting year. This would be too complicated to give to politicians, so the BLS doesn't bother. )
      - 16y ago

jbooth 16y ago

quote: tax payments and the share of the tax burden borne by the top 1 percent climbed sharply This is the reason for that phrase lies, damned lies and statistics. The top 1 percent have been getting an ever-increasing share of gross national income, so their share of gross national taxed income, hence gross tax take, correspondingly went up. Meanwhile, we're staring at a total meltdown on the demand side of the equation -- people who aren't in that top tier have seen their real wages fall consistently since the 1980s. What happens to a consumer economy when you've starved all the consumers? I'm not saying that the tax code created that upward aggregation - technology, globalization and outsourcing labor are probably the biggest factors in that order. But it seems like a solution addressing the exact opposite of the problem.

yummyfajitas 16y ago
...people who aren't in that top tier have seen their real wages fall consistently since the 1980s. This claim doesn't pass the smell test. Can you name a single good or service (note: not a category of goods/services) which is less available today than it was in the 80's? If not, then real wages (i.e., wages measured in terms of the amount of stuff they can buy) have not gone down.
- jbooth 16y ago
  I know you know the definition of real wages, and it's nothing to do with what you said -- it's wages indexed by BLS inflation numbers. http://en.wikipedia.org/wiki/File:United_States_Income_Distribution_1967-2003.svg http://en.wikipedia.org/wiki/File:United_States_Income_Distr... I overspoke. They've stagnated for the bottom 4 quintiles since the early 80s, and declined since 2000. For future trends, I'd extrapolate from the current U-3 and more importantly U-6 figures (they don't look good).
  - yummyfajitas 16y ago
    In general, the definition of economic concepts does not include references to specific government agencies. Are "real wages" not a meaningful concept in Mexico, beyond the reach of the BLS? If you look at the definition of inflation (keep track of units!), you can immediately see that wages indexed by inflation == amount of stuff you can buy. As for BLS inflation numbers, I agree that by that specific measurement, real wages appear to have stagnated. On the other hand, people today have more stuff than they did in the 80's. That suggests the BLS inflation numbers might not mean what you think they mean. (It's actually pretty clear why they don't quite match up if you look closely at the methodology of the BLS. The basket of goods used to compute inflation today is larger than the basket of goods in 1980. A proper measure of inflation would take a fixed basket of goods at t[0] and measure the cost of the same basket of goods at t[1]. But that would require different inflation measures based on the starting year. This would be too complicated to give to politicians, so the BLS doesn't bother. )
    - 16y ago