It’s all about how you frame the question, isn’t it? The issue appears to be tax cuts for the rich: should we or shouldn’t we? By framing the question that way, discussion is limited. By re-framing the question, it changes the answers. Thanks to Investors Business Daily for pointing this out.
President Obama warned that GOP hopeful Mitt Romney’s proposed income-tax cuts will “cost” the government revenue and repeat Bush policies that he says blew up the deficit.
“The centerpiece of his economic plan are tax cuts,” Obama said at Tuesday’s presidential debate in New York. “That’s what took us from surplus to deficit.”
The mantra from the Obama camp is annoyingly repetitive and consistently wrong:
The Obama camp has strenuously opposed Romney’s pro-growth strategy, arguing that tax breaks, especially for the wealthy, “rob” programs for the middle class and poor because they don’t raise revenues and don’t “pay for themselves.”
“It has never been done before,” Vice President Joe Biden insisted in last week’s debate with Romney running-mate Paul Ryan.
But history has shown that when entrepreneurs are allowed “relief” – to keep more of what they earn – they earn more. What a surprise!
The historical tables in the back of the latest “Economic Report of the President” show that the Bush tax cuts generated more, not less, federal revenues — a phenomenon that also held true for Presidents Clinton, Reagan and Kennedy.
All four leaders, two Republicans and two Democrats, slashed taxes for top individual earners or investors. And once these rate reductions took effect and began stimulating economic activity, record individual income-tax receipts poured into the U.S. Treasury.
Kennedy’s major tax cut, which included chopping the top marginal rate to 70% from 91%, became law in early 1964, after his untimely death. It promised to grow the economy and close the budget gap…
To the shock of many naysaying Democrats, the plan worked. The economy grew at an average 5.5% clip, and unemployment fell to 3.8%. In turn, the annual deficit shrank to $1 billion from $7 billion as individual income-tax receipts nearly doubled. (my emphasis)
Reagan did the same:
President Reagan picked up where Kennedy left off, slashing the top personal rate from 70% all the way down to 28%. The historic tax relief triggered record new business start-ups and small-business expansion.
As in the ’60s, tax revenues exploded throughout the ’80s as the economy boomed. Between 1982, when the first round of Reagan’s across-the-board tax cuts went into effect, and 1990, when President George H.W. Bush broke his “no-new-taxes” pledge, individual tax receipts jumped 57% to $467 billion.
The wealthy already pay a highly disproportionate share of their income in taxes – some estimate that the top 5 percent pay half of all taxes. So I suggest that “cutting tax rates” is putting it the wrong way. Giving them some tax “relief” and allowing them to keep more of what they rightfully earned, is the way to go. It changes the conversation. It will change the outcome.