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Politics : Impeach George W. Bush -- Ignore unavailable to you. Want to Upgrade?

To: Karen Lawrence who wrote (56599)	3/26/2006 2:07:02 PM
From: longnshort	Read Replies (1) \| Respond to of 93284

"High taxes on earned income discourage labor supply and reduce the returns from entrepreneurship and higher education. Growth, innovation and human capital development are all harmed as a result."

To: Karen Lawrence who wrote (56599)	3/26/2006 2:07:46 PM
From: longnshort	Respond to of 93284

"supports the view that tax rate differences among rich countries are a major reason for large international differences in market work time."

To: Karen Lawrence who wrote (56599)	3/26/2006 2:08:56 PM
From: longnshort	Respond to of 93284

Messrs. Davis and Henrekson estimate a tax increase of 12.8 percentage points -- regardless whether that tax is on what we earn (an income tax) or what we spend (a value-added tax) -- would shrink the employment-population ratio by 4.9 percentage points, cut hours worked by 122 yearly among those left working in the taxable economy and boost the tax-free underground economy by 3.8 percent of GDP. Taxes matter -- a lot. We don't need astute economists from France and Sweden to prove it. I mentioned some U.S. studies in an August 2002 column, "Supply-Side Goes to Harvard," including one by Ed Prescott, who later won the Nobel Prize. A half-dozen other Nobel laureates have done related research on the nefarious ways high tax rates distort incentives.

To: Karen Lawrence who wrote (56599)	3/26/2006 2:10:25 PM
From: longnshort	Respond to of 93284

Those who keep working past age 65 pay a penalty income tax on most of their Social Security benefits, while also paying Social Security tax for some lazier person's tax-free benefits.

To: Karen Lawrence who wrote (56599)	3/26/2006 2:15:20 PM
From: longnshort	Read Replies (1) \| Respond to of 93284

If the tax on dividends were put back up to 35 percent, for example, I would quickly stop holding dividend-paying stocks in a taxable account. Instead of 15 percent of something, the Internal Revenue Service would get 35 percent of nothing. The Congressional Budget Office estimates the total effective tax rate on the top 1 percent of households rose from 25? percent in 1986 (when the top tax rate was 50 percent) to 31.4 percent in 2003 (when the top rate was 35 percent on salaries, and 15 percent on capital gains and dividends). Their total tax includes Social Security and excise taxes. In stark contrast, the bottom 20 percent saw their overall federal tax burden cut in half -- from 9.6 percent in 1986 to 4.8 percent in 2003. The next highest 20 percent saw their burden drop from 14.8 percent to 9.8 percent. And the middle fifth paid only 13.6 percent of their income in federal taxes in 2003, down from 18 percent in 1986. Ever since the highest tax rates were sharply reduced on salaries, dividends and capital gains, there have been many more rich Americans paying much more in taxes, allowing unprecedented tax cuts for everyone else. If anyone was foolish enough to try putting that history into reverse, by raising tax rates on high incomes and dividends, a smaller group of high-income people would soon pay much less in taxes, as before. And everyone else would pay more.