What happened is relevant. And after the tax rates were lowered, tax revenues went up.
In 1982, the top individual rate was lowered from 70% to 50%. Individual tax receipts were just under 300 billion in that year. In the years that followed, individual tax receipts climbed until they were right around 400 billion. That year the top rate was again lowered from 50% to 28% and individual tax receipts continued to climb until in 1990 they were around 450 billion.
In 2003, the top rate was lowered from 39.8% to 35%. No effect on individual receipts that year and the next but climbing receipts every year until 2007.
And the same thing happened in the Kennedy admin, and according to Mr. Sowell in the Coolidge admin.
No. I think you are wrong. What you are assuming is that people don't react to stimuli. People do more when they are not penalized for it. Taxes are a penalty on economic activity. It stands to reason that if you penalize economic activity, you get less of it. If there is less economic activity there is less money available to tax, so over time revenues won't go up. The converse is true too. The less you penalize economic activity, the more there of it there will tend to be so over time revenues go up. That can't not be if people act as people and react to stimuli. If people were mindless drones, then you would be right.
I disagree.
We're not talking about incomes, we're talking about revenues.
A bit of editorial advice here. You can take or leave it. You probably won't get far with American audiences by telling them how the Europeans have been getting it right for "between 20 and 110 years" and boy are those Yanks thickheaded. We remember too much European history over the past 20 to 110 years for that to be a good approach.
That I fully agree with.
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