| TheRealMafoo said: "Tax rates were slashed dramatically during the 1920s, dropping from over 70 percent to less than 25 percent. What happened? Personal income tax revenues increased substantially during the 1920s, despite the reduction in rates. Revenues rose from $719 million in 1921 to $1164 million in 1928, an increase of more than 61 percent." http://www.heritage.org/research/taxes/wm327.cfm |
Your examples are too extreme. I agreed with you that there is a point of taxation that is too high and is self-defeating. But you are assuming that lowering our current taxes would increase revenue, which is about as far from the truth as you could get. Our current tax level for the top 1% of America is around 30%. If we raised that to say 40% we would gain revenue. This is illustrated on the Laffer Curve even though it is an oversimplification.
None of your examples contradict that either. In each example the taxation went from one extreme to another.
You have also overlooked me and steven's arguments about 1) Inflation and 2) Total Gross Revenue of a Country Increasing each year (which can be substantial, even up to a 50% level in a span of a decade).
The rule of 70 tells us that if you divide 70 by the average rate of GDP growth (let's say 3%), then the economy will double in value in that amount of years, so 23 years in the example. If it is higher rate of growth, it takes even less time.
Total revenue goes up when an economy grows as years go on, which these analyses are not accounting for. All things equal, an economy will collect more revenue the next year than the year before because the economy has grown.
You are arguing the minority view here which is not agreed upon by all economists, thus you cannot claim that we need to disprove you. Just because you pulled it off some website doesn't mean that is what most economists actually believe. Traditional knowledge tells us that raising taxes will increase revenue of course with the concession that there is a point of diminishing returns if taxes become too high.
If we drop taxes from 30% to 10% we will not gain revenue. People are not going to work three times as hard because their taxes are that much lower.
We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls. The only thing that really worried me was the ether. There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke
It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...." Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson
