Another phony study claims high top tax rates just great

smokestacks - wikipediaDec. 16, 2012

By John Seiler

If I got paid $1,000 for every time I refuted a phony government study, I’d be as rich as that socialist billionaire, Warren Buffett.

The latest phony study comes from the “non-partisan” — meaning pro-big government — Congressional Research Service. It supposedly says cutting tax rates didn’t stimulate the economy.

I even can write the refutation by memory.

After World War II, in 1946, everyone feared the Great Depression would return. Instead, taxes were cut sharply and the economy took off. Click here for a study on the boom.

In 1964, the Democratic JFK-LBJ tax cuts were enacted, dropping the top income tax rate from 91 percent to 70 percent, and the economy zoomed in one of the greatest booms ever. The details even are in liberal Robert Caro’s latest volume of his LBJ biography, “The Years of Lyndon Johnson: The Passage of Power.”

In 1981, Ronald Reagan cut the top tax rate from 70 percent to 50 percent, effective 1983. In 1983, the economy soared. In 1986, he cut the rate again to 28 percent, and the recovery kept soaring.

In 1996, Bill Clinton — yes, another Democrat — cut the top capital gains tax rate from 28 percent to 20 percent and fueled the dot-com boom.

In 2001 and 2003, President George W. Bush cut the top income tax rate from 39.6 percent to 35 percent; and the top capital gains tax rate from 20 percent to 15 percent. The economy grew strongly — but only for a couple of years. Unfortunately, Bush made serious mistakes in other areas. The taxes were temporary, hence the impending “fiscal cliff” we face on Jan. 1. He went on wild spending binges that ended the Clinton surpluses he inherited. He allowed Fed Chairman Alan Greenspan to debase the dollar. And he goosed the housing market, leading to a boom-bust cycle and the 2008 crash.

In January, we’re likely going to see some hefty tax increases at the federal level; and tax increases already have been imposed in California.

So in 2013 we’ll see whose theory is right, mine or that of the Congressional Research Service. Here’s a bet, which will be effective only if the CRS contacts me. If the tax increases spur the economy, as the CRS contends, then I’ll shave my head. If the economy fails to ignite, then the CRS goes out of business and refunds the money it wastes to taxpayers.

8 comments

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  1. Barb
    Barb 16 December, 2012, 05:59

    HaHa! The odds are definitely in your favor! Even hollywood is starting to figure this out considering Las Vegas is seeing an uptick in business from this industry: http://www.lvrj.com/business/nevada-welcomes-hollywood-employment-opportunities-183692831.html. But I digress!

    Reply this comment
  2. Barb
    Barb 16 December, 2012, 08:15

    Oh and I forgot, Texas will enjoy a $8 billion surplus! Imagine that! Free market reigns! Now, where is my U-Haul!

    Reply this comment
  3. Donkey
    Donkey 16 December, 2012, 08:49

    Don’t worry about cutting your hair John, we are headed straight to the bottom with our economy. There is only one way to ignite the economy and that is to cut the cost of government, by cutting wages by at least 30%,with no RAGWUS feeders making over $90,000 a year no matter their title, cut benefits by at least 50% for all RAGWUS members, and cut all RAGWUS pensions to no more than $50,000 a year, with no spiking, no COLA’s, no free medical, and no perks of any kind. The entire state is a super nova waiting to happen!! 🙂 <3

    Reply this comment
  4. jimmydeeoc
    jimmydeeoc 16 December, 2012, 09:28

    Meanwhile, here on the range…….where often are heard…discouraging words….

    Watching the news this morning and seeing the profiles of those slain in Friday’s tragedy, I couldn’t help but think……..”Boy, I sure hope this doesn’t do for teachers what 9-11 did for firefighters!”

    I have no doubt my wish will be denied.

    If you recall, 9-11 was the best thing to happen to firefighters since the invention of the pumper truck. No amount of Norman Rockwell paintings of fire trucks and Dalmatians offered the profession better PR. Politicians clambered all over themselves to grant our “heroes” in places like Stockton and San Bernardino every wish and desire. (Those wishes and desires are paid for with YOUR money, BTW….but sadly few make the connection.) What a firefighter in Stockton had to do with 9-11 was besides the point, of course…..they were all heroes, and deserved to be treated as such.

    Which brings us to Stockton and San Bernardino in 2012. Coming soon to a city or town near you!

    Reply this comment
  5. Rex the Wonder Dog!
    Rex the Wonder Dog! 16 December, 2012, 15:53

    If you recall, 9-11 was the best thing to happen to firefighters since the invention of the pumper truck.
    Jimmy, SB400, AKA 3%@50, was what set the pensions payola scam in motion, the scam that bankrupted this state and every muni in it, that passed in 1999 and was implemented in 2000- and the 37 act munis followed it over the next 10 years where 90% of these safety jobs are on the 3%@50.

    I think 911 helped drive the SALARY increase, as it has basically doubled in a 10 year period in this state for all safety jobs-2000 to 2012. Again, Davis gave the prison guards a 4 year contract in 1999 with 9% annual bumps over 4 years, that predated 911 also.

    The total compensation of all gov employees was on the way up before 911, but 911 certainly elped.

    Reply this comment
  6. Hondo
    Hondo 17 December, 2012, 18:41

    I believe that cutting tax rates without controlling spending is economic Al Queda for our kids. And we are the kids. We are at the fiscal cliff. Reagan cut taxes but couldn’t control spending. The same with Bush #2. At least Bush #1 paid his way but he paid for it with a lie,” Read my lips, no new taxes”.
    The ‘Sandy’ disaster bill is flush with money that has nothing to do with Sandy. There is money for the Samoan islands which is 12,000 miles from disaster. The Republicans don’t seem to be trying to hard to limit this mess of a bill.
    I believe in Pay go. Pay as you go. Period.
    Hondo

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  7. jimmydeeoc
    jimmydeeoc 17 December, 2012, 20:22

    Hondo..you are correct. Al Queda indeed.

    Personally I’m just hoping we can follow the British model. WWI devastated a generation and brought an end to Empire, but they muddled along in the decades since.

    Anyone with half a brain can figure out that sooner or later the wheels are eventually going to come off. I’m just hopin’ they stay affixed the next 30 or so years.

    As to the rest of you? Pfft.

    Reply this comment
  8. double l
    double l 19 December, 2012, 17:06

    Does CRS stand for Can’t Remember S___?

    Reply this comment

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