by President Joe Biden just issued his series of tax increases. Here’s the focus: The President wants to raise rates across the board for top earners. The government’s budget plans to see the highest earners, investors and companies face much higher tax rates. As a member of the opposition, how do you position yourself in the face of these proposals in order to be overwhelmed without further ado?
Two guys who voted for a massive cut in the top tax rate to 28 percent in 1986 (photo by … [+]
First you get scared. Above all, don’t counter by arguing for lower tax rates at the top. Since all the evidence since the 1980s, 1960s, and 1920s shows that cutting top tax rates results in over 400 percent increases in tax revenue for the directly affected group, you must resist any proposal to resist top tax rate increases. Otherwise, voters might find that you see through the demagogy of raising top tax rates. How are you going to lose elections and your reputation as the heir to Mellon, Kennedy and Reagan if you don’t submit?
Candidate Mitt Romney in 2012, while capping proposed tax rate cuts: “Under no circumstances will I reduce the share paid by the highest-income taxpayers.” Reduce share? How about increasing it magnificently, specifically by lowering the top earner rate?
Second, delay. They cite the example of President George W. Bush. You say you’re all for tax cuts, but if you do agree to tiny inconsistent cuts at the top, you’re piling on family tax credits and subliminal tax cuts that surely must warm the hearts of the working class, and that Whole ones – particularly the tiny rate cuts at the top – both phase in over a long period of time and then phase out after a few years. Fake real tax cuts at the top leads to a major recession and you become a laughing stock based on your economic record. A well-known socialist takes your place as president. perfection in roadkill.
Third, you are intimidated by expenses. So Reagan won the debate in any serious analysis by cutting tax rates at the top. Absurdly enough, he lowered the personal percentage from 70 to 50 to 28 percent. His successors, Bush and Clinton, split the difference between those Reagan top rates, 50 and 28, and settled on something in the 1930s. Budget deficit: wiped out by 1998. Growth: 4 percent per year over six years in the 1980s and 1990s. Net new jobs 1980-2000: 38 million. Median household income: huge jumps. Federal Reserve after four consecutive years of federal budget surpluses in 2001: We fear there will not be enough government debt to conduct open market operations.
Get out, no chance of being run over by swimming in these conditions. It has to be said that the spending boom from 2001 to 2023 took tax cuts off the table – especially at the top. During this period, government spending rose from 17 percent of GDP to well over 20 percent. Come to his heel. let it prevail Acknowledge that despite the record of tax cuts – particularly at the top – the issue of spending/debt by 2023 has become too serious. The debt is $30 trillion. That’s right, tax cuts at the top result in a 400 percent increase in revenue for the top group, come hell or high water, over a century. But the goal is to be roadkill.
Finally, let the inequality run wild. You let it beat you up They long to feel his punches. The richest cohorts, widely separated from everyone else, come from the 1980s to the present. They make this an absolute problem. They suppress the knowledge that all jobs in this economy come from the after-tax use of their capital by the top 1 percent. They toy with the idea that if the profitability of the concession increases through increases in top tax rates, the tax concession will somehow go down. They blow away the fact that tax rates at the top, including the average state tax burden, are objectively excessive, reaching levels well over 40 percent and often over 50 percent, rendering the wealthy’s capital far from being productive in the service of the general public to be used for prosperity.
These are the tried-and-true ways to get President Biden, the new proposal for high-tax earners, to leave a mark on your back.
The electorate, including the many millions of average earners, fully understands that our enterprising rich are responsible for managing the productivity of our economy. If you want to be non-populist enough not to acknowledge it, a surefire way is not to wholeheartedly attack the president’s tax proposals for top earners.
You can find theory, history and dates in our new book, taxes have consequences a history of the income tax and its effects on the economy.
