Notify of
Inline Feedbacks
View all comments

The debt crisis can’t be solved by taxing the rich. But the debt crisis can be solved by returning tax rates (for all) to where they were in the 1990s, which was not a high tax era, by historical American standards.

It is a fact that the richest 1% of Americans have had a tremendous benefit from tax cuts from the high levels which existed prior to 1981, while the vast majority of Americans have been running in place or falling behind. But selectively raising taxes on the top 1% won’t solve the problem. We’ve all got to go back to the (historically low tax) 90s to make that happen.

My vote goes to the politician who comes the closest to embracing the policies of the Chairmen and majority voting members of the Debt Commission.

– Larry Weisenthal/Huntington Beach, CA

Two things show the problem with Larry’s comments.
1. The graph in the video shows that, no matter what the tax rates have been in the past, the government only pulled in about the same % in total taxes over all those years.
2. Every person who WANTS to pay more, can do so. But people are all talk, no action.
As the video shows, voluntary money sent to pay down the debt has only been $125,000 for all of 2011 so far.
Murdoch, Moore, King, the Clintons, the Pelosis, the Kerrys, et al., are all talk, no action.
Remember that next time Nancy P. bemoans how (without more taxes) people will starve.


1. The graph in the video shows that, no matter what the tax rates have been in the past, the government only pulled in about the same % in total taxes over all those years

That’s not precisely true. We’ve been over this before. There’s a goldilocks zone in tax policy. A 91% marginal tax is clearly too high. I think that the tax rates of the 90s were close to perfect. When Bush cut taxes, the ratio of tax revenues to GDP went down. Same for Reagan. These data were cited and linked in previous threads. A very comprehensive study cited by Mata herself looked at the effect of every tax cut and every tax hike in the past 40 years or so. Each tax cut cost the treasury revenue. Each tax hike increased the treasury revenue. It’s not rocket science and supply side theory has been entirely discredited. Just ask David Stockman, among many others.

– Larry Weisenthal/Huntington Beach, CA

My understanding of the current version of supply side theory is that lower tax rates cause increased incentive for businesses and I was fairly sure thats accepted among all current economists. I don’t know that supply side economics cause greater revenue for the government, in fact I seem to remember reading that during the Reagan administration it did not. What my prediction is for high taxes; many businesses will go overseas and the few investors left will seek tax sheltered investments. The consiquences of having such a high amount of debt is that the country is between a rock and a hard place, as a friend put it.

Cutting entitlement spending and taxes cautiously seems like a good safe option to keep the economy going and the government revenue flowing. I think they call that having your cake and eating it too.

Larry, you are missing the forest for the trees. Regardless of tax rates, the federal government increased spending by nearly $1Trillion dollars in just three short years. In 2001, the budget was $2.1 Trillion and only grew by $800 Billion up to 2008.

Until we get back to fiscal responsibility in DC, and that includes cutting unconstitutional spending, it won’t matter what the taxes are. DC will still spend more than it takes in. Even at the tax rates of the 90’s, you’d still only be talking about $100 Billion or so additional federal revenues, and that still leaves around $1.5 Trillion for 2011’s estimated deficit. That is what I’m talking about. The issue isn’t a taxation problem. It’s a bloated federal budget that the country could not hope to equal, even if taxes for the year went through the roof.

Until the dems really start talking about real spending cuts, changes in taxation shouldn’t even enter the picture.

I am not terribly dull witted but I have to admit that most of what I read about economics just turns into a big whirling mass very quickly.
I understand that corporations get tax incentives to set up and maintain a business that employs people and shares (ideally) a reasonable part of the profits with the workers. Once the infrastructure (roads, cops, fire, water, sewer) costs are recouped, I can see where their tax burden could be somewhat variable. I would like to see a min % of profit being mandatory after any tax breaks are applied.
Investors on the other hand have already gotten those tax breaks on the production side of their investment and I fail to see why it has to be doubled by them getting the same breaks in a different guise. Let them pay tax at a normal rate for income that’s maybe a little higher but not confiscatory to cover the increased demand most rich people have on the infrastructure with the increased services they get (I hope you wouldn’t argue that J. Whittington Slocum in Elysian Fields won’t get a faster response to an intruder call than Kwame Africa Mobutu in S Central Ghettotown). Some other enhancements to the tax bill like adjustments for capital losses would be acceptable.
I know the world’s a far more complicated place than my imagination but why isn’t this at least a rational starting place for an equitable system?

Load on another level of fantasy and assume some effort made at balancing income and expenditures and it would seem like a wonderful dream.