Larry Kudlow has the details.
Noteworthy excerpts:
"There’s no counting how many recessions Times columnist Paul Krugman has predicted, but Bush was exactly right to point out 4 percent real GDP growth during the first half of 2006, brisk productivity rates, 5.5 million new jobs over the past three years, and a historically low 4.8 percent unemployment rate."
"The Congressional Budget Office may now acknowledge that deficit projections were $100 billion too high, but they maintain that only higher taxes in the next ten years will solve the budget problem. This defies common sense. If it pays less to work and invest after-tax, as implied by the CBO scenario, does anyone truly believe people would work harder to expand the economy? If that were the case, then why not raise tax rates back to 70 percent, where Reagan found them, or 91 percent, where JFK first had them? The CBO’s thinking begs credulity."
Why would we expect any different from government bureaucrats anyway, Larry? They tend to be tax and spenders of the worst stripe.
Or for that matter, why would we expect any different from the expected responses to this post, who will tell us that the "Bush McEconomy" is still "bad news" for everone by starting out their comments with something like a "Yeah, but yada yada tax cuts for the rich blah blah woof woof corporate greed snort grunt minimum wage slaves lalalala I can't HEAR you...." or some such nonsense.
Well, since that's what actually happened after the tax increases of '83 and '93, it's not TOTALLY unbelievable. Stocks look more attractive when marginal rates on wages go up relative to rates on cap gains.
ReplyDelete(It might have happened after the '90 tax increase, too, if Iraq hadn't invaded Kuwait and created a ton of uncertainty, and therefore higher prices, in the oil market.)
I'm not arguing for higher taxes. But I think it's only fair to point out that they don't always lead to economic doom.
"... is as silly as saying "Well if tax cuts are so good for the economy, why not cut the tax rate to two percent or zero percent?"
ReplyDeleteNo it's not. Taxes WERE at 70 or 90 percent respectively at the times indicated.
When in the last half century were taxes at two percent or zero?
"...but whether we are currently above or below that area seems like a legitimate point of debate."
Not if we want to emphasize job creation and continued growth.
"The point is, one can think that a tax increase would be helpful without thinking that they should be raised to 70 or 90 percent."
ReplyDeleteOnly if they want to ignore the economic reality that tax increases always supress growth and keep job creation from happening.
From another standpoint, why would our citizenry support a tax increase when there is no oversight provided over wasteful spending on social programs that don't work and provide no value to the great majority?
Bubba, I think your point about oversight is the most important and I think it applies to both taxing and spending.
ReplyDeleteYou point out the social programs, and I agree they need to be looked at in a clear light and dealt with. On another front, now that defense/security is the single largest item in our federal budget, even larger than Social Security, I'd like to see a more oversight there. I don't think we'll like what we find.
On the tax end I'd simply like to see things cleaned up. I'm all for reducing taxes, but I'm even more for making sure that whatever taxes we are paying it's fair and equitable. The way things look right now it appears the middle class is getting screwed and I think we have every right to squeal a little.
Jon, I agree about the middle class burden.
ReplyDeleteAt the federal level, payroll taxes put a heavy burden on us, Congress refuses to stop spending, and the President lets them get away with it.
The state/locals do a great job (in NC, at least)with a regressive sales tax, and a heavy reliance on property taxes.
When Federal taxes were cut for all taxpayers, it seems that most of the state/locals stepped right in to take advantage by engaging in new rounds of spending, accompanied by the requisite tax increases.
In North Carolina, I hope we all remember the irresponsible drunken sailor spending spree a few years ago, followed up by this year's rush to spend the budget surplus.
Throw in Tax Hike Mike's holding on to some of the countiy's share of sales tax revenue to solve Raleigh's problems a few years ago, which raised our local property taxes as a result, and you can see why the middle class needs some help.
But "repealing the tax cuts for the rich" and imposing a return to the draconion wealth redistribution scheme that is the Death Tax will only make the matters wose for the middle class.