Tax Cuts: The B.S. and the Facts

[LSK]

The Myth

Do tax cuts stimulate the economy?

Yes. Tax cuts allow people to keep more of their own money. Therefore, they have more to invest and spend into the economy, and they have more money to start business and create jobs, therefore also helping to stimulate the economy. -- Yahoo Answers

I think when people take a look back at this moment in our economic history, they'll recognize tax cuts work. They have made a difference. -- George W. Bush

The Realities

The brute facts are these:

* Large income tax cuts are followed by a bubble and then a crash.

* High income taxes correlate with economic growth.

* Income tax increases are followed by economic growth.

* Moderate income tax cuts are followed by a flat economy.

* All of this is especially true as applied to the top tax rates, the amount paid on income that exceeds the highest bracket.

more with 3 specific examples from American history.....

http://www.alternet.org/workplace/106410/tax_cuts%3A_the_b.s._and_the_facts

This was the guest on Hour 2 of Thom Hartmann today.

[Belial]

1. Nice.

[Veritas_et_Aequitas]

2. Okay, I'll bite.

The article addresses tax cuts that primarily affect top income earners. Anyone have any information about how a tax increase on that bracket combined with a reduction of taxes on the middle and working classes would affect the economy?

[gogoplata]

3. With all that we know, why is Obama backtracking on the windfall profits tax?

This is what he said in June-

"I'll make oil companies like Exxon pay a tax on their windfall profits, and we'll use the money to help families pay for their skyrocketing energy costs and other bills," the Illinois senator said.
http://www.reuters.com/article/topNews/idUSWAT00963020080609

Now-

President-elect Barack Obama has shelved a proposal to slap the oil and gas companies with a new windfall profits tax because oil prices have dropped so much in recent months, the transition team confirmed today.
http://www.chron.com/disp/story.mpl/front/6143060.html

[mrreowwr_kittty]

4. Wow, that was a great piece. Makes me want to go buy his books. nt