Yet more evidence raising taxes on the wealthy does not hurt the economy

[Cali_Democrat]

So it looks like the Republican predictions of economic armageddon turned out to be bullshit. Not only have the tax increases not hurt the economy, but the budget deficit is the smallest since 2007 thanks to the tax increases.

Wealthiest Pay Higher Taxes With Scant U.S. Economic Harm
By Richard Rubin
1 hour ago

As the political fight over raising taxes for high-income Americans fades away, so are predictions for negative economic fallout.

The bill for President Barack Obama's 2013 tax increases comes due April 15, and the first boost in marginal income rates in 20 years is already reducing the U.S. budget deficit without tipping the economy into recession.

"In advance one always hears the squeals of the oxen who would like everyone to think they are about to be gored," said James Galbraith, an economist at the University of Texas at Austin. "Then it turns out that they are only nicked, and life goes on."

The U.S. government is projected to collect more than $3 trillion for the first time in the fiscal year ending Sept. 30, a 9.2 percent increase over last year, according to the Congressional Budget Office. CBO forecasts another 9 percent rise in 2015 and estimates that more than half of the increases in revenue stem from tax law changes.

http://finance.yahoo.com/news/wealthiest-pay-higher-taxes-scant-040000581.html

[Cali_Democrat]

1. kick

[mindwalker_i]

2. Which may have something to do with Repulicans pushing religion

Religion is based on faith regardless of, or in spite of, evidence. If more people buy religion, then they are more likely to dismiss evidence such as this, which makes it easier for Repubs to keep people from voting to raise taxes on the rich.

Stupidity is a resource for Republicans.

[lark]

3. Stupidity, greed and hate are Repugs ONLY resources.

Tea Party
1%ers
Religious right
Redneck haters

Yep, that's covers it.

[abelenkpe]

4. We don't need more evidence

we just need to return the tax rate under Eisenhower and be done with it. Seems like those were some pretty good times for workers and the working class. Or were they?

[7962]

6. But hardly anyone actually PAID those high rates. A LOT more deductions back then.

Now, more are actually paying close to the rate that they reside in. Its kind of like the corporate rate; its about 40%. But the average rate actually paid by corporations is just above 12%. The rate doesnt matter, only what actually gets paid.

[laundry_queen]

9. That is true

the loopholes need to be closed, asap. It's sick how many ways there are for corporations or wealthy people to avoid paying taxes

[CJCRANE]

13. But it's possible the high rates encouraged spending

which plows money back into the economy.

(Plus there were probably fewer tax havens back then too, so less money was offshored).

But I agree that in general, it's probably better to have moderate tax rates.

[hfojvt]

14. sorry, but that loophole myth is wrong

people were paying higher rates back then. That's why the rich pushed so hard for those rates to be lowered.

And the rich still have plenty of loopholes today.

In fact, Obama and the Democrats, rather than actually raising taxes on the rich, gave them a permanent loophole. Dividend income is now only taxed at 20% instead of at the top marginal rate.

So I figure Alice Walton's taxes got CUT by $52 million a year. And that's a permanent CUT. http://www.democraticunderground.com/?com=view_post&forum=1002&pid=4391547

Maybe when they talk about raising taxes on the rich, they weren't talking about the 8th richest person in America.

[7962]

19. It may not have been all loopholes, but the rich paid more after Kennedy cut rates

maybe because they didnt try as hard to hide their income. Also, very few actually qualified for that 91% rate. I'm not advocating cutting taxes again for the rich, I'm merely pointing out that the only thing that matters is how much the govt actually GETS, not what the rate is. What we have been pushing for, IMO, will end up bringing in less revenue, as a rich man will always find a way around paying a much higher rate. Sticking them with a high rate might make us "feel" better, but in the end revenue is all that matters.
I believe capital gains/dividend income should be taxed at a lower rate for those making less than a certain amount in total income; say 100K? A lot of older people who arent rich get a good bit of income from that. And then have rates on that income rise as your income rises. Maybe have 3 rates, with the final being for anyone above 500K. Then 'ol Alice wouldnt get away with anything.

[JHB]

22. I favor restoring progressivity on very high incomes, which was wiped out under Reagan...

...and has not been brought back by anyone, including Bill Clinton and Obama. Income taxes were more progressive in the "Roaring Twenties" than they are today.

Below is a chart showing the inflation-adjusted tax bracket structure for selected years (based on married couple filing jointly).

One thing that becomes crystal-clear (especially if you look at the whole range, see the charts on the bottom) is how the distribution of brackets have drifted downward. Mostly that has been inflation and failing to "reset" the scale upward over time, but some of it has been deliberate pushing down It's also been part of a strategy of blurring the distinctions at the high end: putting orthodontists in the same bucket as CEOs of multinationals.

So rather than going back to the 50's rates, I think there's something to be said for going back to the 50's bracket structure and then playing around with the numbers in the boxes.





Inflation-adjusted brackets: 1942-2013


Same as above, except covering 1913-2013 (Yes, Virginia, those top rates used to reach into the equivalent of tens of millions):

[hfojvt]

23. that's already true though

my dividend income, for example, is taxed at zero percent, unlike Alice who pays a 20% rate on her dividends.

But why should older people who are NOT working for their dividend income pay a lower rate that younger people who ARE working for their wage income?

And I actually WANT rich people to pay less. A higher tax rate, in my opinion is a disincentive to steal. Here's a CEO, for example making $3 million a year. Perhaps some company foolishly offers them $10 million a year. The CEO looks at the extra taxes they pay with a 70% rate and thinks "screw it, by the time I pay all the taxes I will only get another $2 million. I will be giving more to the government that I am to myself."

That's why I think CEO salaries took off in the 1980s after Reagan cut the rates. Back in 1986, the bottom 50% had more income than the top 1%. That's no longer true, and I blame lower tax rates. Let them pay less because they steal less.

I might also point out that treating dividend income different than other income, just adds more complexity to an already complicated tax code.

[7962]

25. I remember my dad used to say just that about working overtime! Its possible, I guess. nt

[mbperrin]

26. Same deductions then as now.

Start a business, hire people, and deduct it.

Invest in real stuff that makes jobs and deduct it.

Or pay the 92% to the feds.

But today's leeches don't want to contribute to the system that enriches them - they just want a golden shower curtain and ice sculptures that piss champagne at parties.

Cash wasn't allowed to be lazy then. It is now, and that's why things have been and are slow.

[riqster]

5. K & R

[illinoismike]

7. apples and oranges

But corporations pay only on their profit, unlike you and me who pay on our total income less a few throwaways to keep us thinking we got something too!

[chknltl]

8. Bottom line: Taxes have to come from somewhere, where should they come from?

Should they come from those with money or those who have no money? IMHO taxes should follow wealth. Taking taxes from those who have little wealth and cutting taxes on those who have much wealth makes the poor poorer and the wealthy wealthier. PERIOD!

[Cha]

10. Leave the Tax Cheating Billionaries ALONE!

[Brigid]

21. Here you go:

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[L0oniX]

11. Raising taxes on the wealthy forces them to have to work more to get the same income.

Translated: They have to increase the volume of production = hire more people.

[EC]

12. I always contended that the rich very

often don't even KNOW how much they pay. They have accountants and can't be bothered with such work.

[colsohlibgal]

15. Very Little Squawking From The 50's Till Reagan

Almost all millionaires still had millions, it was just that many less had an obscene amount of millions.

Oh - and everyone seems to appreciate our interstate freeway system, paid for by republican president Eisenhower and his 91-92 % top tax rate. That rate remained over 60% under Kennedy, Johnson, Nixon, Ford, and Carter. Republicans and Democrats. Then came the great dismantler, Mr. B actor Reagan. Now the mantra from the right is we must not burden the "job creators".

[joanbarnes]

16. Don't you miss the 50's and 60's when we had an infrastructure?

I realize this more and more as things crumble around us. I always thought it would be like days when I was growing up.

[Brigid]

20. Some of that infrastructure still dates from that era,

and has been due for replacement for years. But it's still there. We are really on borrowed time on this issue.

[blkmusclmachine]

17. ,

,

[gulliver]

18. Why do we even ask the question that way?

We should be asking what effect raising those taxes has, not merely whether it fails to cause harm. Why leave out the possibility (probability in my opinion) that it actually helps the overall economy?

[Turbineguy]

24. Evidence like this is good.

But since the GOP is out to harm America, the opposite will happen.

[IronLionZion]

27. If "job creators" won't create jobs

then what exactly are they good for?