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Wednesday, February 11, 2009

I'm not an economist either . . .

A couple of starting points for me, in the interest of full disclosure.

First, I believe that our world is generally set up to favor those who make more money, and I believe that the amount of money we make is not based on things that I think are morally valuable, but on whether or not we are profitable.

Second, over the last thirty years, we have maintained our top tax bracket at historically low levels. Our decaying infrastructure is clearly a product of that, as is our soaring national debt.

So, for these reasons, I believe we should raise the top tax bracket. I don't know if we have to raise to European/pre-Reaganomics levels. But it should be higher. I also believe the negative effect lower marginal tax rates have on job creation provides a third reason. Lower marginal tax rates concentrates wealth at the point of lowest potential energy. The "top" of our economic structure is the point where money is least likely to move. As I've demonstrated before, this theory is born out over job creation numbers for almost the last 100 years.

See, how the guys who championed lower taxes, Reagan & Bush had worse job creation that Clinton and Carter. But lets also look at the two most recent recession. In 1990 Bush I then Clinton raised taxes, pissing a lot of people off. In 2001 Bush II lowered taxes while waging war, pissing a long of different people off. But look at the recession recovery.

Pretty impressive difference, right? BTW, this graph is the most mitigated way to show our current situation. Notice how our joblessness seems to be picking up steam. This is serious business, and those who want to play games with holding on to broken ideology really need to ask why they are so sure tax cuts without infrastructure spending is the way to go. [That would be Rush Limbaugh and 36 of 41 Republican Senators.]

1 comment:

JimII said...

BTW, I don't know if I sufficiently emphasized how low taxes are now. Reduction in taxes now, particularly in the top bracket, cannot possibly have the impact it did when you were dropping it from 90% or 75%.