Fri Nov 2, 2012, 10:07 AM
Zalatix (8,994 posts)
Proof that Capitalism is little more than religious superstition
"Lower taxes = economic growth" is an item of faith. Couldn't have said it better.
WASHINGTON (Reuters) - A U.S. government agency has withdrawn a report that challenged Republican ideas about taxes and economic growth - an action that drew fire from Democrats who accused it on Thursday of bowing to political pressure.
Republican lawmakers blasted the Congressional Research Service (CRS) report when it was issued in September and then went to the agency to complain. The report suggested that lower tax rates on the wealthy are not linked to economic growth, an item of faith among many conservatives.
The CRS, a non-partisan arm of the Library of Congress, withdrew the report in an unusual move late last month, the agency confirmed on Thursday.
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Proof that Capitalism is little more than religious superstition (Original post)
Response to Zalatix (Original post)
Fri Nov 2, 2012, 10:16 AM
jody (26,624 posts)
1. Study was inconclusive. That's probably true for stimulus packages with borrowed $ also.
Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it
is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the
1970s; today it is 15%. The real GDP growth rate averaged 4.2% and real per capita GDP
increased annually by 2.4% in the 1950s. In the 2000s, the average real GDP growth rate was
1.7% and real per capita GDP increased annually by less than 1%. There is not conclusive
evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the
top tax rates and economic growth. Analysis of such data suggests the reduction in the top tax
rates have had little association with saving, investment, or productivity growth. However, the top
tax rate reductions appear to be associated with the increasing concentration of income at the top
of the income distribution. The share of income accruing to the top 0.1% of U.S. families
increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009
recession. The evidence does not suggest necessarily a relationship between tax policy with
regard to the top tax rates and the size of the economic pie, but there may be a relationship to how
the economic pie is sliced.
Note the authors end with the conjecture "there may be a relationship to how the economic pie is sliced".
That's a subject for further research not addressed in the report.