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From the simply superb Infographic site, Visual.ly, an excellent graphic on the 100th anniversary of income tax in the USA. Note the periods when America enjoyed true booms coincide with a higher tax rate on the very highest income earners. Also note that the bottom rate of tax hasn't been anywhere near this low since 1940. Americans pay too little tax it seems for the amount of services they demand from their government now. Lastly look at CEO pay - unreal.
One great fact from it. When the top rate of tax was introduced it was 7% and only payable on $2m income - which translates to an income of $112B today!!
Amazing how the increase in tax revenues still has resulted in an increase in government deficits.
ReplyDeletePerhaps the government should cut taxes and they would have to be more cautious with their money and spend wisely!
I'm no defender of government spending. It seems wildly out of control in most countries these days. I'm sure it would be easy to slash a few hundred billion out of the US military budget and no-one would even notice. In fact most might sleep a little easier. Still, it wouldn't hurt for the richest few to pay a little more (just judging from the chart above, which probably doesn't have all the facts in it).
DeleteLooking on from the perspective in the UK, I must say that our experience is that increased tax rates do not correlate with economic growth. As Maggie Thatcher said, the problem with Socialism is that eventually you run out of other peoples' money!
ReplyDeleteLove it! That's a great quote. Mrs Thatcher really was one for the soundbite wasn't she?
DeleteI'm all for lower taxes too. I think a flat rate of tax throughout all aspects of life (including corporation tax) would create a much fairer society. It would encourage people to get on and create more along with discouraging tax evasion. But to do that government spending needs to come down and as long as they continue to protect the banks that seems unlikely. Still that's for another rant, another day.