there was already one made that profiled how romney plans to do it. wall street. romney as gorden gekko.
i dont think he will be able to do that to america twice. i think it will go more like this: http://www.youtube.com/watch?v=ZO5EFYY6P14
There is no clear correlation between tax cuts for high earners and economic growth, according to a new study by Congressâ nonpartisan policy analyst.
âThere is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth,â concluded a report by the Congressional Research Service released Friday. âAnalysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth.â
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 â including top marginal rates on income and capital gains taxes â and how it impacts their decision-making. The conclusion: cutting effective taxes on the rich doesnât boost economic growth, but it does correlate with rising income inequality.
âThroughout 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%,â wrote Thomas L. Hungerford, CRSâ specialist in public finance and author of the report.
Even if there were correlation it would be meaningless. You can't compare across time periods without statistically controlling for economic/historical variation and measuring the impact of "published" vs. "effective" tax rates.
1. The period of 1945-1965 was unique in American history. It established the US as the leading manufacturing country in the world, not because of our manufacturing/economic prowess, but rather because of our military might. At the end of WWII, the US had 5% of the world's population and almost 70% of the world's intact manufacturing and transportation infrastructure because most of Europe and Asia had been bombed to ashes during the war. For about 20 years the US had the highest manufacturing price/wage structure in the world. During that period we had very little economic competition from other countries -- completely different than the time period 1965-2012.
2. Most research uses meaningless "published" tax rates. The only rates that matter in economic studies are "effective" tax rates. Effective tax rates have been drastically impacted by two factors: (a) Until the 1980s, wealthy people used leveraged non-recourse loan tax shelters to dramatically lower their effective tax rates. Those shelters were outlawed in the 1980s under Reagan. (b) Wealthy people have for decades "offshored" their money to hide it from taxes. Back in the 1950s and 1960s, people just moved their money to places like Switzerland (usually via trusts). In recent times the laws changed and the "foreign investment vehicles" have become more sophisticated, but the games continue.
Show me a study that controls for the historical after-effects of WWII and uses true effective tax rates across all times periods and I'll believe it. Until then, all these tax/economy studies (by both the left and the right) are junk science.
