[quote=CA renter]Just for fun…this chart shows top marginal tax rates vs GDP. It’s clear that GDP grew quite nicely when top tax rates were at 70-90%. Can one of the anti-taxers please present data, any data at all, that shows how lower taxes lead to a stronger economy and better society? If you look at our own history, you’ll see that the periods with the lowest top tax rates caused/coincided with the greatest concentrations of wealth/income, and led to devastating depressions and economic shocks.
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I think the constant threat of tax increases is actually more damaging than the actual tax increase. Certainty of the tax code is probably more important than the actual code. Of course I honestly don’t think taxes are remotely close to the most important thing in driving the economy forward. The problem is we’ve been increasing debt faster than GDP for decades and the bill is coming due. You can’t spend more than you make forever and we’re getting close to the limit. When that point hits the economy will shrink to a sustainable level and be free to grow again. Preventing that from happening means we going to sit in this quagmire of slow choppy growth for as far as the eye can see.
Tax policy, QE, fiscal stimulus and everything that gets tried to fix the economy will be relatively ineffective and will not produce a positive return on investment. Eventually the market will decide and the powers that be will be powerless to stop it. Is giving government hand outs and government employees more money actually going to increase the total goods and services produced here in America? That’s the only question that really matters and one that demand side economists ignore in our global economy.
