Posted by
Georgiaboy on Saturday, January 13, 2007 1:43:32 PM
Democrats routinely decry tax cuts for the rich. As usual their actions are not motivated by sound economics or fact. This is because it turns out that tax cuts for the rich make them pay even more taxes.
Comparing the impact of the Coolidge, Kennedy and Reagan tax cuts:
- The 1920s Coolidge tax cuts caused the percentage of income tax revenues paid by those with incomes over $50,000 to rise from 44.2 percent of the total in 1921 to 78.4 percent in 1928.
- The 1960s tax cuts caused the percentage of income tax revenues paid by those with incomes over $50,000 to rise from 11.6 percent of the total in 1963 to 15.1 percent in 1928.
- The 1980s Reagan tax cuts caused the percentage of income tax revenues paid by the top 10 percent of earners to rise from 48 percent of the total in 1981 to 57.2 percent in 1988.
Source: Gene W. Heck, "Building Prosperity: Why Ronald Reagan and the Founding Fathers were Right on the Economy," Rowman and Littlefield, 2007.
A similar increase in revenues from the rich has happened under President Bush's tax cuts. The reason is simple. Reward rich people for their economic efforts and they will work harder. This means they pay more in taxes, but get to keep more money also. Everyone wins. The rich people get more money, their economic activity creates jobs for people down the economic ladder, and the government gets more in tax money.
True to form though, the Democrats just don't get it. If they have their way they will increase the income cap for payroll taxes, effectively raising taxes on the rich, they will allow the Bush tax cuts to expire, and if they have their way they would just raise taxes outright. Just think about what Nancy Pelosi did first...she removed the 2/3 majority rule in the House to raise taxes. And the sad irony in it all will be that in their efforts to soak the rich, the rich will end up paying less in taxes.