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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (43126)	5/7/2010 4:08:46 PM
From: TimF	Read Replies (2) \| Respond to of 71588

Most Republicans in the House of Representatives voted against the Kennedy tax cut in 1963. To the extent they did so, it suggests a foolish partisanship and/or a poor understanding of economics. Having the top rate as high as it was before that cut most likely reduces revenue. 90% tax rates are on the wrong side of the Laffer curve, even the 70% rates after Kennedy's cut are probably to high to maximize federal revenue (esp. if you include long run growth effects, but even if you just include relatively short run revenue without giving time for much growth). Unfortunately there is no evidence that the big 1981 tax cut enacted by Reagan did anything whatsoever to restrain spending. Federal outlays rose from 21.7% of GDP in 1980 to 23.5% in 1983, before falling back to 21.3% of GDP by the time he left office. So they where lower when he left office than they where in 1980, despite the general upward trend. "No evidence" would seem to be a false statement, although something like "no conclusive evidence" would still be reasonable. Also consider that with the growth of the economy and the fact that taxes are not indexed for per capita mean or median income increases, and often not even for inflation, the same tax rates will tend to lead to a larger portion of the economy being paid in to taxes. On the tax side you often have to cut taxes to just keep the burden of taxation level. The burden has not generally declined, and real-per capita taxation has increased, so the Feds have still received enough to increase the size of the government even if they did care about deficits.