What America cannot afford is the Progressives’ prize creation: the welfare state for able bodied, working age adults.
Posted by Tina
The quote above was taken from an article by Louis Woodhill, Unconventional Logic – Forbes. It perfectly illustrates the folly of progressive economic “spread the wealth” policy using figures and facts from the last 60 years. Progressive tax and social policies oppress the job creating private sector, result in less revenue to government and perhaps worst of all, encourage citizens to become freeloaders!
“The Sheer Idiocy Of Income Inequality Rhetoric”
In 1955, the top individual income tax rate was 91% and the top capital gains tax rate was 25%. Under this incentive structure, the 400 most successful Americans earned income equal to 0.20% of GDP and contributed 0.59% of Federal revenues. In 2008, the top individual income tax rate was 35% and the top capital gains tax rate was 15%. Faced with these lower tax rates, the 400 most successful Americans earned income equal to 0.75% of GDP and provided 0.80% of Federal revenues.
In other words, the tax rate cuts prompted the “Top 400 to do exactly what supply-side economics would predict. It caused them to produce more income and pay more in taxes.
Progressive Democrats today insist that problems in the economy, schools, healthcare…you name it…can be fixed by “taxing the rich” at much higher rates. THEY ARE WRONG:
As the federal government begins to drown in the debt caused by the failure of 45 years of Progressive policies (advanced by Republicans as well as Democrats), the Progressives in the media try to divert attention by blaming “the rich”… The Top 400 taxpayers are not the problem. Your own numbers show that they are paying more taxes, and a greater share of total taxes, than they were in what you consider to be “the good old days” of 91% tax rates.
If we want a vibrant economy with plenty of jobs and opportunity for everyone, including minorities and graduating seniors, and if we want a healthy responsible citizenry we must pay attention to what the supply siders are telling us. Let the wealthy keep ,spend and invest their money and they will invent new products and produce like gangbusters. In the process millions of jobs will be created…and government will collect MORE, not just from the rich but also from a broad contented base of working, taxpaying citizens.
is 1955 a typo?
i don’t see how 1955 applies to today.
Thanks for the question, question! I’m always happy to clarify.
No, 1955 is not a typo. The author is using a comparison to educate you and me.
Our friends the democrats keep telling us that higher taxes are needed to make the economy work and pay our bills. They want high tax rates for the wealthy. The author tells us that in 1955 the governent got LESS REVENUE from the wealthy with high tax rates. it’s not hard to understand. When the government takes too money from the wealthy in the private sector it results in a sluggish economy, fewer jobs and a lot less extra money to run the government.
If we fail to learn the lessons of the past we are bound to repeat them.