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“Spending is Simulative” That is a half truth! Government spending is simulative if you spend existing dollars in an existing economy, if you have to barrow those dollars and then increase taxes to pay those dollars back,….that is depressive or counter productive!
The left keeps following the Keysian theory telling us that tax cuts hurt “REVENUES”. In current budget negotiation they keep saying we need to increase revenues, we can’t cut taxes now!
It is said, that if you don’t learn from history, you are doomed to repeat it! So let’s take a look back at the historical data on “TAX CUTS”.
Historically, we have had four marginal rate tax cuts. And in each case, the revenue to the U.S. treasury increased significantly. In 1920 we had the Coolidge tax cut; JFK cut taxes in the 60’s, Reagan in the 80’s & the Bush Tax Cuts.
The Coolidge administration cut the top marginal tax rates from 73% to 24%. The resulting effect was the economy grew 59% from 1921 to 1929. Effectively increasing the Federal Treasury from $719 million in 1921 to over $1.1 billion 1929. That is a 61% increase! During this time period, there was ZERO INFLATION with a more than six percent annually growth rate.
During the Kennedy administration, marginal tax rates were cut from 91% to 70% and the economy grew by 42%, that was an average of 5 percent a year from 1961 to 1965 and tax revenue to the U.S. Treasury was increased by 62%. If you adjust for inflation, revenues rose by one-third.
Under Ronald Reagan, marginal tax rates were cut from a top of 70% to 28%. Revenues to the U.S. Treasury almost doubled. According to the Budget of the U.S. Government, For 1997, Office of Management and Budget. Revenues increased from around $500 billion in 1980 to $1.1 trillion in 1990.
In every case, the personal income taxes paid by the so-called-rich increased after their tax rates were cut. The top 10 percent of earners during the Reagan administration paid 48% of the income tax collected from 1981 and 1988.
Now what were the effects of tax policy during Bush and Clinton years? How did the Clinton increase in taxes change in the revenue received by the Treasury? Harvard professor of economics Martin Feldstien, estimated that the U.S. Treasury would have collected two-thirds more revenue during the first three years of the Clinton presidency had his administration NOT raised taxes. During Bush, Tax revenues in 2006 were 18.4 percent of gross domestic product which is actually above the 20-year, 40-year, and 60-year historical averages. The 20 percent tax revenue increase between 2004 and 2006 represents the largest two-year revenue surge since 1965-1967
So you have to ask yourself, if all this is true and history demonstrates that tax cuts increase revenues and grow the economy, They, the left; one, did not learn form history or two, they have made a decision to ignore history! Why? Why do Obama and the Democrats continue to insist that we have to raise taxes? Could it be politics? Could it be agenda driven? Could it be that they care more about their interest and not yours? If you ignore these facts and continue to support people that are intentionally undermining our economy, destroying jobs and inflating our cost of living, please stay home on Election Day.