Study: Tax Cuts For The Rich Do Not Spur Economic Growth

Discussion in 'Politics & Religion' started by Free Thinker, Sep 17, 2012.

  1. There is no clear correlation between tax cuts for high earners and economic growth, according to a new study by Congress’ nonpartisan policy analyst.

    “There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth,” concluded a report by the Congressional Research Service released Friday. “Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth.”

    The findings are pertinent to a central debate in the presidential election, wherein President Obama is pushing to end the Bush-era tax cuts on high incomes, while his Republican challenger Mitt Romney insists on cutting rates across the board 20 percent below current policy. Democrats contrast the tax hikes of the 1990s and ensuing economic growth with the tax cuts of the 2000s and relatively meager gains that followed. Republicans, meanwhile, argue that the recovery is weak because the economy remains shackled by regulatory and tax burdens.

    The study delves into the last 65 years of U.S. tax policy pertaining to high earning Americans — including top marginal rates on income and capital gains taxes — and how it impacts their decision-making. The conclusion: cutting effective taxes on the rich doesn’t boost economic growth, but it does correlate with rising income inequality.

    “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 real GDP growth rate averaged 4.2% and real per capita GDP increased annually by 2.4% in the 1950s. In the 2000s, the average real GDP growth rate was 1.7% and real per capita GDP increased annually by less than 1%,” wrote Thomas L. Hungerford, CRS’ specialist in public finance and author of the report.

    http://tpmdc.talkingpointsmemo.com/2012/09/crs-study-taxes-economic-growth.php
     
  2. Tax Cuts For The Rich Do Not Spur Economic Growth
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    True or false.....it doesn't matter

    It's my money and why do you want to tax it and take it?
     
  3. Let us define rich.
     
  4. jesus told me that the well off should help the less well off.
     
  5. Slowly but surely we have eliminated taxes on the poor, to the point where now only 50% of people pay taxes, therefore based on the logic of your article it is safe to assume that allowing people to keep more of their money causes recessions.

    Therefore the best way to fix the economy is to drastically increase the size of government.
     
  6. I hear ya. I gave a homelss guy a pack of smokes and some red dog.

    why what do you want to give the homeless guy with my money?
     
  7. do you think you will ever be in the well off catagory to even have to worry about it?
    in any case somebody has to pay the bills for a functioning society. do you like living in a functioning society?
     


  8. We cant all be big, free thinking truckers with enormous liberal minds and money, the world needs ditch diggers too.....
     
  9. Study, schmudy! Clearly the poor create jobs, correct? At least that's what we're to believe since "studies" show that the rich do not. I'm quite thankful for all the homeless that provide jobs in their factories. Sheesh.
     
  10. <iframe width="560" height="315" src="http://www.youtube.com/embed/rowo9c1Wp5o" frameborder="0" allowfullscreen></iframe>
     
    #10     Sep 17, 2012