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http://graphics8.nytimes.com/news/business/0915taxesandeconomy.pdf

"The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie.

However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. As measured by IRS data, the share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. At the same time, the average tax rate paid by the top 0.1% fell from over 50% in 1945 to about 25% in 2009. Tax policy could have a relation to how the economic pie is sliced—lower top tax rates may be associated with greater income disparities."

So in other news, water is wet.

It's funny though that after decades of cutting tax rates on the rich and getting nothing for it, the idea that it works remains an absolute guiding principal of the Republicans, and is still largely unchallenged by Democrats.



EDIT - Congressional Research Service, not Organisation. Was thinking of the CBO...

Thanks for posting this, sebster, definitely a study that has been worth doing and is worth knowing. I wonder whether the silence that your post seems to meet isn't kind of telling...

Surely it's just dem darn hippie commie-nazis trying to fool us?

The entire report focuses on tax rates, but makes no mention of the effective rate (i.e. what "millionaires and billionaires" actually paid after deductions, loopholes).

That honestly puzzles me.

Either the Congressional Research Service feels that there's no difference between the two, which would be a rather eye-opening revelation, or they haven't considered the difference noteworthy.

One of my Tax Law professors said it more simply: "even if the rich only get 10 cents on the dollar, they still want more cents then the other rich guys."

Now we just sit back and wait for this to slide off of the front page as every economic conservative and republican on this forum ignores it.

 ShumaGorath wrote:
Now we just sit back and wait for this to slide off of the front page as every economic conservative and republican on this forum ignores it.

Never! We are the 47 percent!

A respectable study undermining the entire GOP platform?

Water is indeed wet ...

Ah. But, is fire hot? Is free form Jazz awesome? Do androids dream of electric sheep?

Still waiting for the Republican party to stop being lazy and start actually trying to live in the real world, but I guess I'll have to keep waiting.

This is all fine and dandy, but anyone who's convinced themselves of the opposite isn't going to read this study. It's more fuel for the opposition, but the GOP will pull some lie out of its hat to refute the study.

Actually I pointed out that the study focuses on nominal tax rates, but I didn't see anywhere it mentioned effective tas rate (i.e. what people actually paid).

It's like saying the Speed limit is 55, but ignoring that it only takes 1 hour to go 60 miles because everybody's 5 over.

So either the CRS feels that there are no tax loopholes, or it ignores tax loopholes.

To my mind, that's confusing.

Well, exemptions, deductions, and credits have only increased over time. Since rates ahve decreased over time, it's sensible to think that, if anything, the drop in effective tax rates is even steeper than in nominal rates.

Still, nothing will outwieght the cut in captial gains taxes, and to a lesser extent dividends becoming capital gains.

Its not a economics group. its a bunch of glorified librarians. Whatever.

Now if the University of Chicago came out with a definitive report that could be peer reviewed I'd take notice. These guys, again whatever, but can you tell me where the periodicals are.

 Frazzled wrote:
University of Chicago

I don't really trust neoliberals on economics.

Good read. Though as far as I know, not a single economist is actually saying that taxes on the rich are choking off economic growth.

Fraz: Why not find me a study that shows that low tax rates on the rich increase productivity and economic growth? I mean, you must be basing your views on such studies, if you're so willing to dismiss this one as not good enough to shift your current paradigm.

US economy 1980 - 1988.

EDIT: I am sure there are plenty of studies resulting in support for both sides of the argument. The CRS just isn't up to that, at all.
People clinging to it are clinging to a document prepared by a few in house people.

Do better.

Well, one could point to the 1800s-1900s in the US when the government was something like 2% of the US economy, there were no income taxes, and Real GDP/GNP more than doubled.

 sourclams wrote:
Well, one could point to the 1800s-1900s in the US when the government was something like 2% of the US economy, there were no income taxes, and Real GDP/GNP more than doubled.

Yep

Wasn't that a period of intense exploitation of natural resources though? In an economy vastly different to that of today?

What about the economy 1980 - 88 was significant? And thanks for replying in seriousness, because it's good to see the other side of the argument. As a foreigner the american attitude towards tax can be surprising, and I appreciate being educated on where it comes from.

I'm sure I'd get a Frazzled response if I showed something like this to my Father.

He refuses to leave his conservative bubble, about anything, especially long term reports made by libruhls and reported by the NY Times, a libruhl rag.

He's also convinced that all Muslims are terrorists; I wonder where he got that idea.

Da Boss wrote:What about the economy 1980 - 88 was significant? And thanks for replying in seriousness, because it's good to see the other side of the argument. As a foreigner the american attitude towards tax can be surprising, and I appreciate being educated on where it comes from.

Republican Jesus was the president during those years, so if Frazzled is afraid that if he doesn't laud that godawful era with the proper amount of praise he'll go to Bank Hell.

1980-1988 was like Friday down at the Money Mart: everyone's got lots of cash in their hands, borrowed against their future.

Da Boss wrote:
Wasn't that a period of intense exploitation of natural resources though? In an economy vastly different to that of today?

What about the economy 1980 - 88 was significant? And thanks for replying in seriousness, because it's good to see the other side of the argument. As a foreigner the american attitude towards tax can be surprising, and I appreciate being educated on where it comes from.

A similar level of recession, plus inflation turned into the strongest rebound since WWII. In comparison to Obama's 1.5ish% quarterly growth, Reagan growth at this time was on the order of 6% quarterly growth.

tax cuts a be all and end all? Of course not. We have serious structural issues in the economy that need to be addressed, and aren't being addressed by either party.
I'm just noting the CRS is the definitive answer to...well nothing. They are a helpful information gatherer to Congress, nothing more, nothing less.


Automatically Appended Next Post:

 daedalus-templarius wrote:
I'm sure I'd get a Frazzled response if I showed something like this to my Father.

He refuses to leave his conservative bubble, about anything, especially long term reports made by libruhls and reported by the NY Times, a libruhl rag.

But I am sure you, with your vast decade+ of experiance have a much more informed viewpoint.

Yep, ultimately that's the lie getting told everybody by both parties.

On the one hand, you have Paul Ryan charging at the fiscal cliff, preparing to smite it with a weapon that makes even bigger fiscal cliffs, while on the other hand you have entitlements that are burdensomely huge, and projected to grow to ridiculously and impossibly enormous if we stay the course.

Everybody is going to have to give up tax breaks, and many are going to have to give up entitlements--it will either happen voluntarily, or forcibly when we simply run out of money (or TAXMAGEDDON 2013).

 Frazzled wrote:


But I am sure you, with your vast decade+ of experiance have a much more informed viewpoint.

Oh ho ho, you're so clever!

Decade+ huh? What am I? 15?

 daedalus-templarius wrote:
especially long term reports made by libruhls and reported by the NY Times, a libruhl rag.

Regardless of which side your political leanings, news agencies are by and large not research agencies. I think the only mainstream exception would be Bloomberg, and only because their primary income is from subscription to their market services platform, a research tool. If you rely on news media for your information, you are only ever going to have the most superficial understanding of anything.

 daedalus-templarius wrote:

 Frazzled wrote:


But I am sure you, with your vast decade+ of experiance have a much more informed viewpoint.

Oh ho ho, you're so clever!

Decade+ huh? What am I? 15?

I was guessing 16 actually. Come on you can tell Uncle Frazzled, I was off by what, six months? I'm sure you're old for your age.

 Frazzled wrote:

 daedalus-templarius wrote:

 Frazzled wrote:


But I am sure you, with your vast decade+ of experiance have a much more informed viewpoint.

Oh ho ho, you're so clever!

Decade+ huh? What am I? 15?

I was guessing 16 actually. Come on you can tell Uncle Frazzled, I was off by what, six months?

Hilarious troll is hilarious, maybe try doubling those years and you'll be close.

 daedalus-templarius wrote:

 Frazzled wrote:

 daedalus-templarius wrote:

 Frazzled wrote:


But I am sure you, with your vast decade+ of experiance have a much more informed viewpoint.

Oh ho ho, you're so clever!

Decade+ huh? What am I? 15?

I was guessing 16 actually. Come on you can tell Uncle Frazzled, I was off by what, six months?

Hilarious troll is hilarious, maybe try doubling those years and you'll be close.

or halving them?

 Frazzled wrote:


or halving them?

You are adorable