Daniel Packman wrote:
> In article ,
> King Samuel <"all that I say and do"> wrote:
> .....
>
>>http://www.nationalreview.com/kudlow/kudlow200402090841.asp
>
>
>>When Reagan moved to implement his tax-cutting policies in 1981 he was
>>severely criticized for favoring the rich and decimating U.S. financial
>>solvency. Democratic candidates on the campaign trail are echoing those
>>very same criticisms today. But Reagan was unmoved by partisan attacks
>>twenty years ago. He first lowered top marginal personal tax rates to 50
>>percent from 70 percent, making the rate reduction fully effective in
>>1983. He next lowered corporate tax rates to 34 percent from 48 percent.
>>Then, in 1986, in a second tranche of tax reform, the Gipper reduced the
>>personal rate for individual incomes all the way to 28 percent. .....
>
>
> Tax rate changes are met with changes in investments
Correct.
Lower taxes lead to increased investment and surely away from tax
"sheltered" investment.
> so that over a
> surprisingly wide range of tax rates, actual taxes paid remain almost
> constant. If we look at the last table here of average tax rates:
>
> http://www.taxfoundation.org/prtopincometable.html
>
> we see that actual tax rates have not changed that much over the
> last two decades.
With this stunning proviso:
"The Tax Reform Act of 1986 changed the definition of Adjusted Gross
Income, so data above and below this line are not strictly comparable."
And in discussing adjusted gross income you are completely
smoke-screening the issue of tax rates.
AGI is impacted by several key parameters.
http://www.investorwords.com/163/AGI.html
Adjusted Gross Income. The amount used in the calculation of an
individual's income tax liability; one's income after certain
adjustments are made, but before standardized and itemized deductions
and personal exemptions are made.
You've floated this lead balloon before and it still doesn't fly.
> The theoretical Reaganomic approach combined both tax cuts and
> spending decreases. There is often political will to do the former,
> but rarely the latter. One might argue that his policies led to the
> increased budget deficits only because the policy was not really tried.
Yet those portions he did implement have been wildly successful.
> ......
>
>>If you look at the entire two-decade-long period of Reaganesque tax
>>cutting, America's economic success rate is apparent to all.....
>
>
> The success of the economy is not the issue.
Of course it is - the overall economy is the most useful broad measure
we have.
> Asserting a direct
> connection with tax policy and this success requires some evidence.
Already presented.
> A strong case can be made that his policies ended up damaging the
> economy, not helping it.
>
> http://www.brothersjudd.com/index.cfm/fuseaction/reviews.detail/book_id/611/Triumph%20of%20P.htm
>
Stockman's waffle, though perhaps expedient and even prudent at the
moment, was anything but far-sighted and indeed let some of the momentum
ebb.
In the final analysis though that in no way diminishes Reagan's legacy
nor his vision.
And the capital expansion of the US economy was indeed fueled by
sweeping and much needed tax reform.
http://www.frontpagemag.com/Articles/Printable.asp?ID=3217
Overall, Reaganomics held that stimulating the "supply side" of the
economy through tax cuts and production incentives would yield five
basic benefits: it would control inflation, increase economic growth,
dramatically expand employment, increase tax revenues and lower interest
rates. All of these goals were achieved in the Reagan years. Americans
used the tax cuts to invest in the economy and the decreased interest
rates boosted housing sales and renewed economic activity. As prosperity
increased, the profits at the top trickled down to both middle class and
underclass citizens.
Reaganomics was built on a shrewd and fundamental understanding of the
Economics Approach and the CBA. Reagan perceived that limited government
intervention in the economy would leave imperfection in place, but he
recognized that many problems simply had to play themselves out in the
market. In appreciating this economic law, Reagan pursued a policy that
generated an impressive level of economic well-being for the majority of
Americans. It is for that reason that history has vindicated
Reaganomics. And it is for that reason that Bush is travelling down the
road that Reaganomics paved.
http://moneycentral.msn.com/content/invest/extra/P85848.asp
In 1980 when Reagan was elected, inflation was running at 13.5%
annually. It was under 5% when he left office in 1989.
Under the guidance of cigar-chomping former Federal Reserve Chairman
Paul Volcker, the federal funds rate that influences lending rates
throughout the economy soared to 19% in 1981 -- compared with today's 1%
-- and the economy slid deep into recession before recovering in late 1982.
“That tight money policy, first under Volcker and then under (current
Fed Chairman Alan) Greenspan could not have been done without strong
backing from the president,'' Niskanen said. “Reagan backed up Volcker
throughout that politically difficult time until growth finally resumed
in November 1982.''
The offsetting influence against tight money, and a key part of
Reaganomics, was a dramatic reduction in tax rates. From a peak of 70%
when he took office, the top marginal rate was slashed to 28% for most
working Americans.
Niskanen said it was “a bum rap'' to claim the benefits of tax cuts went
to the wealthy while the debt burden was shared by all.
“The actions taken initially in 1981 set us on a sustainable growth path
and they were absolutely necessary to get on to that path,'' he added.
Remarkably, the will to apply the stern medicine of stiff interest rates
and to risk cutting taxes so dramatically came from a president who
received small credit for grand thinking.
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