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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Peter O'Brien who wrote (347967)	1/27/2003 12:18:40 AM
From: Steve Dietrich	Respond to of 769670

<<If you agree that 1980 was a particularly bad economic situation, I still don't see how you can be so critical of the early results of the Reagan tax cut.>> I'm not critical so much as i'm saying the supply-side argument about this is bunk. How many times have you heard "Reagan cut taxes and revenue doubled?" It's a disingenuous assertion. Revenue grew more under Carter, and under Clinton, and under Ford, and under Johnson, and under Kennedy... <<I think we would have had a calamity on the order of the Great Depression if Carter's tax policies had persisted.>> I really doubt it. There's not much correlation between tax policy and the business cycle. What correlation there is, is the opposite of what you'd like it to be. Carter's Fed Chairman Volcker probably deserves most of the credit for taming inflation with his high interest rates, painful as they were. <<Regarding "effective" tax rates, I am of the opinion that "marginal" tax rates are much more of an influence on economic activity.>> Marginal rates are pretty low too. Considering that Federal Revenue as a percentage of GDP remains fairly steady no matter what marginal tax rate we use, it would seem a lot of these debates are overstated. I think we both agree that a less progressive and less loophole-ridden tax code would be better. But since most of what politicians do is to fight over who pays and who gets the booty, representing the interests of those who bankroll them, that's going to be a tough paradigm to change. Steve