When someone tells us he\’s going to give us the real skinny always worth looking to see what he\’s leaving out so as to mislead.
The point is this: we will always have big deficits as long as tax policy is radically different from the post-second world war average until about 1981. And Republicans now want to cut taxes, mainly on the wealthy, even further. So the GOP\’s moaning about the deficit has no credibility whatever to anyone who knows budgets. But most people, and most reporters, don\’t know that during the Eisenhower administration, the top marginal rate was 91%, and that it was 70% for the following two decades or so, and that capital gains (which accrue overwhelmingly to the rich) were usually taxed as ordinary income. That lack of perspective distorts a whole range of popular assumptions about social equity now versus, say, the 1950s.
Spot what he left out?
Yup, the brackets. That 91% kicked in at about $1.9 million in current dollars. Not the over $250k which is said to be \”rich\” now.
Oh, and, of course, it was that well known rightist Republican JFK who pointed out that such rates were counterproductive, lowered them and saw an increase in revenue collected (well, he didn\’t actually see it as a grassy knoll shot him but his successor did).
Plus, of course, he\’s making the usual Anglo-Lefty mistake of thinking that you can pay for big government by taxing the rich. You can\’t, to pay for big government you need to have a broad based consumption tax. Otherwise you\’ll kill economic growth.
Interesting point of the day. The US tax system is more progressive than that of most other OECD countries.