Corporate Tax or Compound taxes?

Think about this. You work and earn money. You get to keep part of what you earn after the government takes their cut of your productivity. This after-tax income is what you have to pay your bills and save for Continue reading

Will you make more money if you raise your rates?

When I had a lawn service, if we were too busy to be able to take care of all of our customers we could raise our rates, run off a few accounts, and make more money for doing less work. Continue reading

Later Experience with Tax Rate Cuts: Less if More

In 1981 President Reagan signed the Kemp-Roth Tax Cut which trimmed the top marginal tax rate from 70% to 50% over three years, being fully implemented by 1984. Inflation adjusted tax revenue declined in the four years before 1983, but Continue reading

Tax Cuts and Statistics: Figures don’t lie. Liars figure.

In college I took Speed Reasoning (text by Scrivens) and learned to quickly spot flaws in logic. In graduate school statistics “How to Lie with Statistics” was required reading. With this combined education I have little tolerance of flaws in Continue reading

Early Experience with Tax Rate Cuts: Less is More

Let’s look at U.S. tax policy in the last 100 years. In 1913 the top income tax rate in the United States was 7%. With World War I, rates were quickly increased, peaking at 77% in 1918. You might expect Continue reading

Confiscatory Tax Rates and Maximizing Revenue

To answer a question about my comment on confiscatory tax rates, let me give my definition. As I use the term, a confiscatory tax rates is a rate that reduces economic productivity to yield the same tax revenue that a Continue reading

More on Paying for Tax Cuts

I have some more to say about “paying for tax cuts.” I understand the need for finding a way to pay for increased spending, but I object to the assumption that a lower tax rate always means lower revenue. Economists Continue reading

Using Irresponsible Rules for Fiscal Responsibility

So we have discussed Congress’ rule for budget projections and for pay as you go. Let’s go back to the Alternative Minimum Tax for a current example of how the use of these together is mandating bad decisions. Alternative Minimum Continue reading

Congress’ Irresponsible Rules for Fiscal Responsibility

After years of criticism over its uncontrolled deficit spending, Congress passed some rules imposing fiscal responsibility on itself. We will look at two of them here. Each, taken on its own seems like a good idea. Together they become irresponsible. Continue reading