Study: Tax Cuts for the Rich Don't Spur Growth

[RandomGuy]

Duh.



Cutting taxes for the wealthy does not generate faster economic growth, according to a new report. But those cuts may widen the income gap between the rich and the rest, according to a new report.

A study from the Congressional Research Service -- the non-partisan research office for Congress -- shows that "there is little evidence over the past 65 years that tax cuts for the highest earners are associated with savings, investment or productivity growth."

In fact, the study found that higher tax rates for the wealthy are statistically associated with higher levels of growth.


The finding is likely to fuel to the already bitter political fight over taxing the rich, with President Obama and the Democrats calling for higher taxes on the wealthy to reduce the deficit and fund spending. Mitt Romney and the GOP advocate lower marginal tax rates for top earners, saying they fuel investment and job creation.

http://finance.yahoo.com/news/tax-cuts-rich-dont-spur-151649273.html

Link to the actual report... skip to the "conclusions" section:
http://graphics8.nytimes.com/news/business/0915taxesandeconomy.pdf


The top income tax rates have changed considerably since the end of World War II. Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%.
Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the 1970s; today it is 15%. The average tax rate faced by the top 0.01% of taxpayers was above 40% until the mid-1980s; today it is below 25%. Tax rates affecting taxpayers at the top of the income distribution are currently at their lowest levels since the end of the second World War.

The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie.

However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. As measured by IRS data, the share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. At the same time, the average tax rate paid by the top 0.1% fell from over 50% in 1945 to about 25% in 2009. Tax policy could have a relation to how the economic pie is sliced—lower top tax rates may be associated with greater income disparities.42

[boutons_deux]

"top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution"

Money is power (to corrupt govt). The 1%'s "votes" count a lot more than the 99%'s

The extreme imbalance in wealth between the 2% and the 98% means there is also an extreme imbalance in the political power such that any attempts to fix the imbalance will easily, successfully be blocked by the 2% using their control over the govt.

[TeyshaBlue]

"In fact, the study found that higher tax rates for the wealthy are statistically associated with higher levels of growth. "

WTFBBQ?

LOL..Nevermind. I can't read today.:lol

[DarrinS]

How much tax should the rich pay?

And what defines being "rich"?

[mavs>spurs]

true, but i don't think we need to raise the taxes on them either. raising the nominal rate does nothing, just set it at a reasonable amount so that there is less incentive to find ways to evade, and close up all the loopholes so that they actually have to pay taxes at all.

[Winehole23]

you're dreaming. no one will close the loopholes. Neither Obama nor Romney can do it without Congress, and Congress doesn't have the guts to piss off the class of political donors who'd lose out on tax reform.

[Winehole23]

wrong thread

[SnakeBoy]

you're dreaming. no one will close the loopholes. Neither Obama nor Romney can do it without Congress, and Congress doesn't have the guts to piss off the class of political donors who'd lose out on tax reform.

:lol The guy you think should be president is promising to abolish the IRS and replace it with the most regressive tax plan around...who's the one that's dreaming?

[mercos]

The attempts to make tax policy seem like the most important economic factor on the table have always been BS to me. Our economy has boomed under much higher tax rates, and our economy has improved after tax hikes. There are so many factors that go into economic growth. While politicians have focused on tax rates for the past 30+ years, our economy has been growing fundamentally weaker.

[Wild Cobra]

I don't see reducing taxes on the rich as spurring much growth. There are not enough that fall under the "income tax table" system to worry about. Reducing taxis is just the right thing to do, along with closing stupid loopholes.

Seriously. How many rich pay via capital gains instead of paying taxes on income?

This whole argument is stupid.

Do you guys really think that sports stars should pay the 35% federal tax, soon to be 39.6%? Are there enough of them, and enough Hollywood actors to make a dent?

[boutons_deux]

Ryan evading any details

Congress will handle the details of Romney’s tax plan

Republican vice presidential candidate Paul Ryan says that President Mitt Romney would be leading from behind and letting Congress fill in the details of his tax plan.

During a recent interview with the Christian Broadcast Network, :lol :lol Ryan refused to say which specific tax loopholes would have to be closed to pay for Romney’s budget plan, which concentrates tax breaks on the wealthiest Americans.

We want to say this is our vision, lower tax rates across the board for families and small businesses and work on the loopholes that are enjoyed by the higher income earners, take away their tax shelters so more of their income is subject to taxation. That lowers everybody’s tax rates.”

http://www.rawstory.com/rs/2012/09/17/paul-ryan-congress-will-handle-the-details-of-romneys-tax-plan/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheRawStory+%28The+Raw+Story% 29&utm_content=Google+Reader

:lol So Ryan is saying he and Gecko will raise taxes on the rich? :lol

Ryan's on plan, passed TWICE by the House, would lower Gecko's income tax to less than 2%. :lol

[Latarian Milton]

doesn't make much difference on their lives whether the tax rate is 25% or 75% imho, money is just a figure for these guys

[Wild Cobra]

doesn't make much impact on their lives whether the tax rate is 25% or 75% imho, money is just a figure for these guys
You are right, but I don't think you know why you are right.

Most rich people pay on a capital gains rate. Not on the income tax table rate for most their money.

What good does it do to raise income tax rates when it has so little effect?

[SnakeBoy]

Most rich people pay on a capital gains rate. Not on the income tax table rate for most their money.


Well you have to define rich first. If it's $200-250k, or $88k as some here believe, then that's not even close to being correct.

[boutons_deux]

"rich ... $88k as some here believe"

who's saying income in the $80Ks is "rich"?

that's where the upper 20%, the upper quintile, starts.

However, offer a $50K household another $35K/year, then ask them how they feel.

You seem to be unable to understand how badly off, how paycheck-to-paycheck, how credit-card indebted, so much of America is.

[Wild Cobra]

Are you talking to me?


"rich ... $88k as some here believe"

who's saying income in the $80Ks is "rich"?

I'm using the idea that "millionaires" are rich. Not the people who work for a paycheck.


that's where the upper 20%, the upper quintile, starts.

Please stop with the quintile statistics.


However, offer a $50K household another $35K/year, then ask them how they feel.

Yes, Obamatrons will vote for Obama if he promised that.


You seem to be unable to understand how badly off, how paycheck-to-paycheck, how credit-card indebted, so much of America is.

I do understand. "Credit card indebtedness" is because people are stupid. Spending past their means. Seriously... Who in their fucking right mind racks up thousands of dollars of credit card debt at credit card rates?

[RandomGuy]

How much tax should the rich pay?

And what defines being "rich"?

Maybe we should let Mittworth Romnington pick a level. :lmao

[RandomGuy]

I don't see reducing taxes on the rich as spurring much growth. There are not enough that fall under the "income tax table" system to worry about. Reducing taxis is just the right thing to do, along with closing stupid loopholes.

Seriously. How many rich pay via capital gains instead of paying taxes on income?

This whole argument is stupid.

Do you guys really think that sports stars should pay the 35% federal tax, soon to be 39.6%? Are there enough of them, and enough Hollywood actors to make a dent?

I think taxes should be increased across the board, to pair down the deficit. I don't mind paying in a bit more, as we all need to pitch in.

[TeyshaBlue]

I think taxes should be increased across the board, to pair down the deficit. I don't mind paying in a bit more, as we all need to pitch in.

Absolutely agree.

[boutons_deux]

I think taxes should be increased across the board, to pair down the deficit. I don't mind paying in a bit more, as we all need to pitch in.

aka, for Repugs and WC, that means "broadening the tax base" so the 99% pays even more, aka, Repug idea of "shared sacrifice".