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Response to benld74 (Original post)

Thu Nov 1, 2012, 04:02 PM

5. Summary says study was inconclusive. That's probably true for stimulus packages with borrowed $.

 

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.

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Arrow 18 replies Author Time Post
benld74 Nov 2012 OP
KansDem Nov 2012 #1
99th_Monkey Nov 2012 #4
Angry Dragon Nov 2012 #11
Roland99 Nov 2012 #2
yends21012 Nov 2012 #3
LineReply Summary says study was inconclusive. That's probably true for stimulus packages with borrowed $.
jody Nov 2012 #5
hootinholler Nov 2012 #10
jody Nov 2012 #13
1StrongBlackMan Nov 2012 #12
Smilo Nov 2012 #6
hootinholler Nov 2012 #7
CBHagman Nov 2012 #8
Angry Dragon Nov 2012 #9
Rain Mcloud Nov 2012 #14
Bernardo de La Paz Nov 2012 #15
Pryderi Nov 2012 #16
Overseas Nov 2012 #17
animalcrackers Nov 2012 #18
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