Tuesday, April 19, 2011

How much blood can be squeezed from a stone?

Answer: About 7.8% This from a Wall St Journal Op Ed. The Journal notes that revenue from the personal income tax has been 7.8% of GNP since WWII. Back in the 50's the top incomes paid 90% and the everyone's rates were 20%. Today the rates are considerably lower, but the revenue from personal income tax is still 7.8% of GNP.
Apparently higher tax rates cause people to find more tax dodges, or work less, or take compensation in the form of perks (travel, fancy company dining room, stock options, you name it)
Conclusion, Obama won't be able to tax his way out of his $1.6 trillion deficit. But he's gonna try.

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