DEFINITION of 'Effective Tax Rate' The average rate at which an individual or corporation is taxed. The effective tax rate for individuals is the average rate at which their earned income is taxed. An individual's effective tax rate is calculated by dividing total tax expense by taxable income. The effective tax rate is often a more accurate representation of a taxpayer's tax liability than its marginal tax rate. Two companies that are in the same marginal tax bracket, for example, may end up with different effective tax rates depending on their earnings. This occurs particularly with a progressive, or tiered, tax system, where different levels of income are taxed at different rates http://www.investopedia.com/terms/e/effectivetaxrate.asp See efeective tax rates by group?
So your chart actually disproves your claim that the effective tax rate was within 5% for the period from 1960 to 1980 for the top percent of earners. Backs up claims that system has been skewed to favor the wealthy. Thanks for walking into the trap.
The 1968 Tax Surcharge alone added 10% to rates across the board - but regardless, there were plenty of tax laws passed during this period.... nothing as dramatic as Reagan's overhauling of the tax code, but still plenty of change. Don't get too distracted by the top rates - sure, they matter - but so do rates all across the board. Anyway, I'll have more on this when I start that thread - but let me ask you this... do you feel going down the road of 1970's economic policies is the road we should be on?
1970's economic policies? How about the TAX POLICY OF THE 1945-1980 PERIOD, THAT'S THE POSIT RIGHT? lol What happened in the 1970's? Oh right we turned away from the protectionist policies to a "global economy" conservative "think tanks" pushed US on thanks largely, IMO, the Powell memo of 1971 to the Chamber of Commerce and their propaganda (along with OPEC cartel and US biz greed left unchecked))....
Oh right THEIR TAX "Burden" actually decreased slightly below that 5% high point BEFORE Ronnie gutted their effective rates. Yes the tax system IS skewed towards the wealthy, at least since 1981
That sounds more like the 80's than the 70's, Dad. To paraphrase Gordon Gekko (a 1980's icon if there ever was one), greed is good - it opens up competition and competition is what keeps you strong and vibrant. If someone can make widgets better and more cheaply, don't they deserve the rewards? And if you want to compete with them, you'd better be on your game... and if you can't beat them, well, you lose. That's fair, isn't it? Protectionism makes you fat and lazy and complacent - it's what leads to 1970's-style stagflation.
Started in the 1970's. What happened in the 1980's is the rights OTHER bad policy, gutting the top taxes as they shifted the burden to the working class AS Ronnie spent, spent, spent, tripling USA debt Yeah gutting taxes on the "job creators" so they could get more efficient and off shore US jobs, helped US alright. If you think paying a dollar for a Tshirt from a slave shop is "progress" (Re-)Introducing: The American School of Economics When the United States became independent from Britain it also rebelled against the British System of economics, characterized by Adam Smith, in favor of the American School based on protectionism and infrastructure and prospered under this system for almost 200 years to become the wealthiest nation in the world. Unrestrained free trade resurfaced in the early 1900s culminating in the Great Depression and again in the 1970s culminating in the current Economic Meltdown. Closely related to mercantilism, it can be seen as contrary to classical economics. It consisted of these three core policies: protecting industry through selective high tariffs (especially 18611932) and through subsidies (especially 193270) government investments in infrastructure creating targeted internal improvements (especially in transportation) a national bank with policies that promote the growth of productive enterprises rather than speculation. It is a capitalist economic school based on the Hamiltonian economic program. The American School of capitalism was intended to allow the United States to become economically independent and nationally self-sufficient. Frank Bourgin's 1989 study of the Constitutional Convention shows that direct government involvement in the economy was intended by the Founders. The goal, most forcefully articulated by Hamilton, was to ensure that dearly won political independence was not lost by being economically and financially dependent on the powers and princes of Europe. The creation of a strong central government able to promote science, invention, industry and commerce, was seen as an essential means of promoting the general welfare and making the economy of the United States strong enough for them to determine their own destiny http://en.wikipedia.org/wiki/America...ics%29#Origins"
Reagan cut taxes on the top-end to foster investment which led to increased supply to offset the excess demand situation which had created the 1970's inflation. Excess demand was created by a Tax Code which taxed the wealthy too much and working class too little. Now, fair is fair - everybody should be taxed a rate according to their ability to pay and at a rate consistent with long-term balanced economic growth...and Reagan's tax cuts were apt for early 80's short-term, but they flattened rates too much leading to the point where we are now - the tax code is too supply-oriented and demand has been inhibited because of it. I'm no Reagan apologist - he made mistakes and he spent too much, but I'm not going to blame him for not being able to see 30 years into the future. No pain, no gain. Blah blah blah.... Yeah... Smoot-Hawley did wonders for the economy.
Yes, blah, blah, blah Ronnie cut taxes at the top to 50% his first 6 years AND yet only had 14 million private sector jobs in 8 years to Carters 9+ million in 4. Cutting taxes did NOTHING to "increase" investment. Yes his ignoring regulator warnings from Mr Gray that started in 1984 on his S&L crisis helped create his excess debt and the financilaztion of America that like his later disastrous tax cuts stayed with US for a LONG time There is NOTHING showing Ronnie's tax cuts for the rich helped support the supply side of the market, either via jobs created or growth of the economy. NONE. Now IF you want to consider the start of a Biz cycle he inherited and growth, you can ATTEMPT to show better growth, but STILL nothing to show better results than Clinton's growth later or growth pre Ronnie! Not seeing into the future? Like increasing SS taxes that totaled about $2.7+ trillion in the next 30+ years that hid the true costs of his tax cuts for the rich? No pain, no gain? Oh you mean there was PLENTY of pain with very little gain. Smoot/Hawley? Yeah, that GOP bill didn't work out to well for US, of course that was ONE "protective" bill in our history. Weird that the "prob Biz GOP was generally for it, and guys like FDR and liberals were against it??? I'll note you DIDN'T refute GOOD GOV'T POLICY like the American school of economics however. Weird
I'm not trying to make this into a partisan debate, Dad. Neither party has a monopoly on the facts. Republicans have good and bad policies, just like Democrats have good and bad policies - I'm just trying to find out what works from both parties and what doesn't work and then shape it into a rational, coherent and optimum set of policies. Democrats good, Republicans bad (or vice-versa) is just so much baby talk to me. Now to go back to my original post to Shanty at the beginning of this thread, Productivity seems to increase (ie, 1982-2007) when taxes are lower on the wealthy and it seems to decrease to when they are higher (ie, 1966-81) - my inference from this is that the wealthy put this increased after-tax capital into investment which leads to better plant and equipment which increases the productivity of the workforce. This is a good thing. However, you can have too much of a good thing to the point that supply outpaces demand...which is what is happening now (and which happened during the Great Depression, for that matter) and that will lead to a fall in productivity as well. The trick is to find the right balance.
Just more nonsense. CONSERVATIVE POLICY (NOT TALKING PARTY) NEVER WORKS EXCEPT FOR THE BENEFIT OF THE 1%ers Your "rate" nonsense make ZERO credible sense WHEN you use EFFECTIVE tax rates versus just marginal rates. THERE IS NO TIE INTO LOWERING THE TOP TAX RATES TO ECONOMIC GROWTH. NONE. To state otherwise is a lie! Your selectively ignoring the EFFECTIVE TAX RATES (you know the thing economists look at) is noted however STUDY: These Charts Show There's Almost No Correlation Between Tax Rates and GDP http://articles.businessinsider.com/2012-03-30/markets/31259597_1_gdp-capital-gains-rates-taxes Capital Gains Tax Rates and Economic Growth (or not) If you read the editorial page of the Wall Street Journal (or surf around the nether regions of Forbes.com), you may come to the conclusion that no aspect of tax policy is more important for economic growth than the way we tax capital gains. You’d be wrong http://www.forbes.com/sites/leonard...l-gains-tax-rates-and-economic-growth-or-not/
