[quote=SK in CV]First, the argument was not that higher top tax rates cause economic growth, but rather there is little evidence that it inhibits growth. [/quote]I thought when you said that “Higher top tax rates encourage businesses to spend money…” mean higher top tax rates cause/encourage economic growth. Business spending usually increase economic growth, right?
[quote=SK in CV]The correlation on the bottom rates would be just the opposite. People who don’t make very much money, tend to spend everything they make. As income (and rates) rise, more is saved. Spending (or in the case of businesses, investing and growing) is stimulative (or more specifically, increases in spending are stimulative) , whether the source is public or private. Higher rates on business with excess cash flow encourages spending/hiring because the higher the rate, the smaller the after tax cost. Lower rates lead to higher savings. [/quote]Past data doesn’t agree with you here. As I’ve shown, in the early 60s and late 50s (you agreed that that period of time had good economic growth), low income people had VERY high tax rate. Yet, we still had good economic growth. So, like you said about high taxes for the rich doesn’t inhibits growth, there’s also little evidence that high taxes for low income people inhibits growth as well. Unless you have data to prove this point. I haven’t run across any yet.
BTW, if you increase taxes on corporation, what make you think those companies won’t just pick up and leave for countries with lower taxes? We are in a global economic world after all. Don’t we have to compete with other countries as well?
[quote=SK in CV]You’re right about the standard deduction being a % of AGI back then. But like now, there were personal exemptions. I think it was $600 per person. So the first $600 (per exemption) plus 10% of AGI was deducted from AGI before calculating the tax.[/quote]Keep in mind that someone making $1k back then (~$7k today), they still have to pay taxes on $300 (~$2100) today. The only people who don’t have to pay taxes are people who make less than $600 ($4200 today). Today, that number has more than doubled.
