Archive for July 16th, 2012
» posted on Monday, July 16th, 2012 at 10:10 pm by OutwithJoe
The top tax rate under Jimmy Carter was 70 percent. Obama says we need more money from the rich (increase taxes) so we can spur economic growth. Then why did we have the recession under Jimmy Carter (the top tax rate was 70 percent)? It proves higher taxes do not grow the economy.
In 1980, President Carter, his supporters in Congress and the Liberal News Media (AKA Obama News Corp) asked how can we afford presidential candidate Ronald Reagan’s proposed tax cuts. Reagan’s critics claimed tax cuts would lead to more inflation and higher interest rates, while Reagan claimed the tax cuts would lead to more economic growth and higher living standards.
WHO WAS RIGHT?
- Inflation went from 12.5 percent in 1980 to 3.9 percent in 1984.
- Economic growth went from minus .2 percent in 1980 to plus 7.3 percent in 1984.
- Interest rates dropped from 18.9 percent on a 30-year mortgage to 8 percent.
WHAT REALLY CHANGED AFTER REAGAN’S TAX CUTAUGUST 15, 1981?
Economic growth was more than 50 percent higher for the next seven years after the tax cuts, than the previous seven years under Jimmy Carter.
Rapid economic growth unlike government spending programs (stimulus package) proved to be the most effective way to reduce unemployment and poverty (are you listening Mr. Obama?) while creating opportunity for the disadvantaged. Reagan’s peacetime boom created nearly 35 million jobs and the economy was one third larger when Reagan left office.
THE MYTH ABOUT TAX CUTS AND THE RICH
Under Reagan’s tax cuts, the top 10 percent of wage earners’ percentage of taxes paid went from 48 percent in 1981 to 57.2 percent in 1988. That means even though tax rates were lowered, more money came into the Treasury (which proves it’s not what the tax rate is, it’s how much money comes in).
John F. Kennedy (Democrat) said, “Our true choice is not between tax reduction on one hand and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenue to balance our budget; just as it will never produce enough jobs or enough profits.” (So business can expand.)
In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low. The soundest way to raise revenues in the long run is to cut tax rates now. (Mr. Obama can you hear me, “now!”) With Kennedy’s across-the-board tax cuts, tax revenues climbed from 94 billion dollars in 1961 to 153 billion dollars in 1968 (62 percent increase). Reagan tax revenues went from just over 500 billion dollars to one trillion dollars.
HARDING AND COOLIDGE TAX CUTS
When Harding took office in 1921, he faced a severe economic recession from Woodrow Wilson (Democrat). Harding with Treasury Secretary Mellon (Geitner could learn something from Mellon) cut government spending by 40 percent. After Harding’s death, President Calvin Coolidge and Mellon continued the tax and budget cut policies of Harding. Obama should adopt Coolidge’s actions. Coolidge cut taxes four times, reduced the national debt by 33 percent while maintaining surpluses every year in office. Christopher Frenze of the Joint Economic Committee said, “The Reagan tax cuts like similar measures enacted in:
1920 – Harding/Coolidge
1960 – John F. Kennedy
showed that reducing excessive tax rates stimulates growth, reduces tax avoidance and can increase the amount and share of tax payments by the rich.
THE BEST ECONOMIC POLICY: TAX CUTS, BUDGET CUTS AND LIMITED GOVERNMENT … BETTER YET CONSTITUTIONAL GOVERNMENT.
Art Laffer (Economic Advisor to Reagan) said, “The policies in place by the Obama administration will not work. I do not see any improvement in the economy. There is no incentive to produce in this economy; too many regulations stagnating business creation.” He also feels very likely that double-dip recession can happen.
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