The Clinton years in the US is only one example
Not a bad example since it spans nearly 10 years [I actually cited the decade, not just the Clinton portion of it, though I did cite the tax increase which may have been unintentionally misleading.] It also reflects the economic environment of a global economy, much more so then prior decades would.
Calling it the biggest tax increase increase ever was mostly just a tactic by Republicans to bash Clinton. As a percentage of GDP it was not the largest tax increase ever. Also the rates where not the largest ever, not even close.
Agreed. But it was also largely directed up the upper income levels.
The higher tax rates probably did slow economic growth in the US, but the rates did not go so high as to really be a disaster.
If it did, and that is wholly speculative, Greenspan did act to lower growth as it was, anything higher would most certainly have been met by Greenspan with an earlier and/or more agressive raise in interest rates to restrict the growth.
And even if there would have been higher growth and Greenspan didn't do anything about it. I think you could make a pretty good argument that a higher growth rate would have been a worse result. There was a lot of growth in the 90's that was funded with debt. If there was more investing occuring as a result of this hypothetical growth then you could make a reasonable hypothesis that the additional investment would have been funded with even more debt, resulting in a larger crash then we've seen to date.
The effect of the tax increase was negative but the effects of deregulation (much of it under Reagan)
You mean like the Savings and Loan deregulation. Deregulation of the energy sector has had it's problems. It's not terribly clear to me that deregulation of the airlines has been swell.
and improvments in technology (and in techniques to effectivly utilize the technology), and monetary factors all had a more powerful effect on the economy then the tax increases.
You've made my case here. There's lots of other factors that have more impact then mere marginal tax rates.
And higher unemployment, and lower GDP per capita.
Generally true. Though there are some exceptions and then there are the exceptional cases like Germany that absorbed an entire country of unemployed.
The higher taxes and a higher level or regulation in Europe have made them less wealthy then they would have been without these things.
Personnally, I've found it more complex than that. Europe also has universal health care and a population that lives longer. There cost of health care delivery is substantially lower than that of the US on a per capita basis; which is not an insignificant contribution to the GDP. There's regional differences on how Europeans spend their disposable income; the French spend a large percentage on clothing, England and Germany spend a lot on travel [a much larger percentage than the US does. You can look at the balance of trade between the US and the EU, the're not hugely different.
Back to the point, I made a claim that the 90's largely disproved your claims of the advantages of lowering tax rates and then you 'took exception' to that by claiming that it hasn't been true over the last two decades; de-regulation; improvements in technology; and monetary factors were all stronger drivers than lowering the marginal tax rates.
jttmab |
