4 ms·
That’s a great idea, but the simplified data is grossly misleading. I don’t know all of the details specifically, but I know that the tax reform act of 1986 di
by csa 7y ago
That’s a great idea, but the simplified data is grossly misleading.
I don’t know all of the details specifically, but I know that the tax reform act of 1986 did two things: 1) closed a lot of tax loopholes/deductions, and 2) lowered the tax rates.
Pre-1986, the scope of what could be done to avoid taxes was insane. No one who made money was paying the headline rate on any amount of their income — any decent accountant would pay for themselves instantly with the savings they could produce.
If you want to use this type of data, it might be more prudent to look at different numbers — maybe effective tax rates (i.e., actual tax paid divided by actual income earned). The numbers might tell a slightly different story.
- newguy1234 7y agoCompletely agree, was also going to point out the same thing. Comparing the top tax bracket next to GDP growth is just a very bad comparison to say the least. The tax reforms over the years distort it so much that the comparison is effectively useless. If anything, the only thing it does show is that the people using that metric (top tax bracket vs GDP growth rate) don't really understand how the tax system has changed over the decades. It also clearly shows why you need to have a full and complete understanding of tax reforms/laws over the decades to really be able to debate the issue effectively. Most people seem to only have an understanding from google searches or news articles. It is no surprise that politicians use this ignorance to their advantage.
- cs702 7y agocsa: Please do NOT misrepresent what I wrote! My post clearly mentions that the table is "one of many possible examples," and that I have not been able to find a relationship. (FWIW, I chose this particular table as an example mainly because much of today's political debate, e.g., in the Democratic party, is about rising marginal tax rates for the highest brackets.) Please do not attack a straw-man!