Class Warfare Blog

December 2, 2012

Why the Marginal Tax Rates Must Go Up

If the marginal tax rates go up, they go up for everyone. If the rates for the first $250,000 are kept lower, they are kept lower for everyone. Fair is fair.

When Ronald Reagan got the Congress to lower marginal income tax rates in the 1980’s, he did so by trading off “loopholes.” (Loopholes are just other people’s tax deductions.) That was a good bargain for him because once the rates went down, new loopholes were created (e.g. the carried interest deduction).

All of the studies say the Republicans ideas about taxes and the economy are wrong: studies say that when federal tax rates go up, federal spending goes down, they say when the rich get tax breaks, fewer jobs are created, etc. In almost every case Republican orthodoxy is wrong. Consequently the republicans simply shrug and say the studies are wrong. (If you don’t have an argument, deny the other guy has one at all.) This is like obvious, people, rich people buy assets with their money (stocks, third homes, etc.) not goods. If they purchased goods, there might be a trickle down effect, but they don’t. (If they buy goods, demand for goods goes up and people are hired to create those goods.)

Republicans have suppressed unions, thinking it is good for businesses. It hasn’t been. And the beat goes on.

The rates on the highest amounts of income must go up, higher than what is currently being discussed if possible, so business owners and CEOs find better uses for their money than paying it out in taxes.

Don’t fall for the “we can increase revenue without raising rates” argument, it is as fallacious as all the rest. If we make that trade, new “loopholes” will start their way through the Congress minutes later.


1 Comment »

  1. “If you don’t have an argument, deny the other guy has one at all.” – Yes, the Republicans tried to do even better, by trying to suppress the CBO study that tax cuts for the rich don’t create jobs.


    Comment by List of X — December 2, 2012 @ 10:24 pm | Reply

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