Two things. One, the attack on the WTC shattered Americans' illusion of safety and security. And the hawks took full advantage of that vulnerability by instituting all these changes. At the time, there were liberals who warned that we might not be thrilled with the consequences after the shock passed, but little attention was paid. So if Americans don't want the defense budget cut, there is at least some excuse. As for the rest, it helps to remember that at this point, unless one is around 50 or over, he doesn't know anything else. Therefore all the supply-side stuff becomes a well-of-course-what-else. Bringing about changes in those attitudes may be next to impossible. I suppose it depends on how bad it gets and how arrogant the wealthy get. Look at 1789. And there's always the possibility of native intelligence gaining the upper hand.
Top rates were much reduced, and the rate of the lowest bracket raised. Rates for the lowest brackets were LOWERED. <p style=" margin: 12px auto 6px auto; font-family: Helvetica,Arial,Sans-serif; font-style: normal; font-variant: normal; font-weight: normal; font-size: 14px; line-height: normal; font-size-adjust: none; font-stretch: normal; -x-system-font: none; display: block;"> <a title="View Fed U.S. Federal Individual Income Tax Rates History, 1862-2013 on Scribd" href="http://www.scribd.com/doc/190499803" style="text-decoration: underline;" >Fed U.S. Federal Individual Income Tax Rates History, 1862-2013</a></p><iframe class="scribd_iframe_embed" src="//www.scribd.com/embeds/190499803/content?start_page=1&view_mode=scroll&show_recommendations=true" data-auto-height="false" data-aspect-ratio="undefined" scrolling="no" id="doc_15313" width="100%" height="600" frameborder="0"></iframe>
This is undeniably true. In fact it is self evident. It is also self-evident that such a situation would be disastrous. That is what happened to Argentina, and the result was disastrous. This is then, a situation to be avoided. If you are proposing higher and higher debt costs as a solution to overspending I have to tell you that that is idiotic. Don't go around suggesting this if you want to be taken seriously. There is far too much attention paid to what is spent and far to little to what is bought.
[note for Arnie's nice tables see his post above] Thank you Arnie. It obviously was some troulble to track down and post those nice tables. Too many times we find all kinds of claims posted in these forums that are not backed up. I try to always be accurate, and when I discover I've made an error I am quick to admit it. With regard to the Reagan tax cuts, I am referring specifically to the rate changes made pursuant to the 1986 tax Reform Act. If you go to 1987 and the succeeding few years in your table, you will see what I mentioned in my post. In 1986 (for simplification I'll just use the single filer column) the tax rate for incomes not over $2,480 was 0.0% . In 1987 it was raised to 11 percent for the first $1800, and for the next 680$ of taxable income the rate really went up! From 0% previously, to 15%. These are huge increases at the low end of taxable income!!!. Also, you can see that by 1988 nearly all of the progressiveness in the U.S. income tax structure had been wrung out. By 1988 there were only two rates: 15%, that you would pay on the first dollar through $17,850, and 28% from $17,851 through infinity. Not only is that a Wonderful simplification of the tax Table but a Wondrous shrinkage of the rate spread from 70% in 1981 down to a spread of 13% by 1987. Not quite a totally flat tax but approaching it, and we, by now, know the consequences. Of course we didn't have to wait until 2014 for the downside of drastic rate compression to be evident. Even though rates have gone back up some since Reagan, they remain relatively compressed. Thanks once again for these nice tables.. It is also, by the way, important to look at the infamous 1981 Reagan cuts, evident in the 1982 Table. This was a drastic cut. But in this cut the rates at the very low end did drop a little. It is the onerous 1986 act that raised rates at the low end! We all refer to these cuts as the Reagan Cuts, and the economic policies of his time as Reaganomics, but of course we know the impetus came from his economists, including the notorious Wendy Gramm, of CFTC and ENRON. Reagan was a baseball announcer and actor who's charm, good looks, wit, and speaking voice made it possible for him to become President. We should not hold him responsible for the mistaken economic "innovations" made during his presidency. But we should blame ourselves if we still, in light of the evidence, allow ourselves to be taken in by these failed policies.
Pie, I don't know if you're just trolling or you really are delusional enough to believe the crap you post. Let's just focus on the most egregious, your claim that lowered marginal rates on the highest incomes and increased rates on lower ones are responsible for income inequality. Your erroneous claim about rates being raised on the lower levels has already been pointed out, so I am ignoring that. Simply comparing rates is far from the whole story however. The 1986 changes did away with a host of deductions that the rich used. So lowered rates were not in the nature of a gift to them, as you suggest. It was a reordering of the system not unlike what some so-called reformers want now. Unfortunately, as in most reforms, the bargain was broken by democrats. Clinton forced through large increases in those rates. The lost deductions remained lost however. For many of us, we learned a valuable and indelible lesson: don't make tradeoffs unless you have a way to make them permanent. Back to income inequality. Your claim is nonsense because nearly half of workers pay no income taxes at all. It doesn'tmatter what their marginal rates are, since they are paying nothing. In fact, a goodly number of them get money in the form of the Earned Income Credit, a cash payment to lower income earners, a negative tax rate if you will. As for the "rich", most of them, actually pretty much anyone upper middle class and above, pay a form of flat tax called the Alternative Minimum Tax. It's 28% with a standard deduction after taking away certain disfavored itemized deductions. If you ae concerned about income inequality, you need to look at CEO compensation and the carried interest loophole for fund managers. Curiously, democrats are not interested in addressing either, despite all their handwringing. They just want to raise taxes on wage earners, but iof course that is their answer to pretty much any problem. You also need to look at free trade and offshoring, both of which got a boost under Bill Clinton when NAFTA was passed, and both of which have been devastating for workers.
Just a few comments. Read my post immediately above yours. You will see that rates on the lowest bracket were raised in 1987 . My thesis remain is tact whether loopholes were closed or not. Loopholes may have reduced the effective rate paid by those in the 28% bracket in 1987. I ignored these loopholes. So if any of them remained the compression of effective rates was even greater than I pointed out. It is true that under current tax code many low income workers pay no net income tax after their refunds. I don't know that was true to the same extent during the the Reagan era. Do you? Regardless, the rates in the tables applied to net taxable income. As you can see from the Table posted by Arnie, comparing 1986 with 1987, the rates were raised on the lowest brackets of net taxable income, while they were lowered on the higher brackets of income. There was huge bracket compression between 1981 and 1987, net of any loopholes. I agree with you that the carried interest loophole for fund managers should be looked at. CEO compensation is another matter altogether, addressing it fairly will require ingenuity.
"With regard to the Reagan tax cuts, I am referring specifically to the rate changes made pursuant to the 1986 tax Reform Act. If you go to 1987 and the succeeding few years in your table, you will see what I mentioned in my post. In 1986 (for simplification I'll just use the single filer column) the tax rate for incomes not over $2,480 was 0.0% . In 1987 it was raised to 11 percent for the first $1800, and for the next 680$ of taxable income the rate really went up! From 0% previously, to 15%. These are huge increases at the low end of taxable income!" Bam!
bam? as I pointed out to all of you prefascists lefties a dozen of times.. .its the top .05% and particularly the .02% who have gathered in all the benefits. so the proper way to fix income inequality would be to tax nobody... or to only progressively tax staring at .05%. why are you leftists not calling for that?
by the way arnie nice work. real data always seems to stop the pre fascists from mis representing the results of tax cuts. and piezoe that is an interesting almost proof of leftist pyschotic break. you always admit your mistakes? lets review... did revenues go up after the bush please check the tables. did the budget go down for from 04, 05 and 06. Now... do you care to repeat you claims about the bush tax cuts not increasing revenue or admit your mistake?
Yes, bam. The tables Arnie linked, to support his claim that during Reagan tax rates for the lower incomes were lowered, show the opposite.