Have you heard that income tax on the wealthy is being discussed at the rate of 77%?
Have you heard of economist Art Laffer? His Laffer Curve (maybe you've heard of that) shows that tax revenues go up with production and increasing wages until the tax rate reaches about 50%. Then there is a direct inverse relationship between rising tax rates and declining output. Higher taxes, therefore, are not the answer. Reduced spending - dramatically reduced spending - is.
Laffer says that regardless of what the tax rate is, the fact is that about 18% of the income earned in America is paid to the government in income taxes. So, if rates were substantially lower than the are now, people would have more disposable income and might be inclined to increase consumption - still yielding the government their 18%. If they rise substantially, same 18%. Why not go for the ecomonic stimulation with lower rates?
By the way, he goes on to say that an 11% Flat Tax or Fair Tax would completely replace everything collected by the feds right now - income tax, FICA, Medicare, estate taxes, excise taxes, etc. In fact Jerry Brown proposed a 13% flat tax in 1992 in his campaign for the Democratic Presidential nomination (he wanted the 2% surplus to pay down the debt).
Definitely not funny. Worth coinsidering.
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