You’ll be waiting a long time for an answer because, according to a report by the Congressional Research Service, it simply does not work.
The CRS is a nonpartisan arm of Congress. In gathering information for its report, the CRS examined data going back to the late 1940s, when the top marginal tax rate was typically above 90 percent, and growth in gross domestic product averaged 4.2 percent. The top rate in this century is typically 35 percent, and growth in GDP has average 1.7 percent.
And in the past 65 years, the CRS found no evidence connecting “a relationship between tax policy with regard to the top tax rates and the size of the economic pie.”
“The reduction in the top tax rates appears to be uncorrelated with saving, investment and productivity growth,” the report concluded.
But it went on to say that there might be a relationship to how the economic pie is sliced and cited evidence that income inequality grows substantially during periods when tax rates on the highest-income taxpayers are lowered.
Voters should urge politicians to stop talking tax cuts as a way to create jobs and get the economy moving. If they really want to stimulate the economy and get people back to work, then they need to revamp the overly complicated tax code to make it simple and especially fair ensuring that everyone, rich and poor, pay their fair share.
The tax code, as it’s designed now, heavily favors the rich who are able to take advantage of tax breaks and deductions middle and lower class folks cannot and can never take advantage.
That, is what needs to change, and that is what will get this country moving forward again.
Filed under: Chuck's View | Tagged: Chuck Kurtz, Congressional Research Service, CRS, Economic growth, Economic inequality, Gross domestic product, Johnson County KS news, Olathe KS news, Tax, Tax cut, Tax rate |