Supply-side economics continues to fail us
One of the significant issues for me in the upcoming election will be taxation. We have been sold on the idea of reducing marginal tax rates, reducing tax rates on dividend income and reducing tax rates on capital gains and this would produce economic growth. It is called Supply Side Economics.
Our tax rates were reduced during the Bush administration and extended during the Obama administration. I don't think an individual would need a Ph.D. in economics to know this has not worked, especially if you are part of the middle class, which has not experienced an increase in average income since 2006.
A recent study by the nonpartisan Congressional Research Service using data from the past 65 years found that there is no correlation between top tax rates and economic growth. In addition, the study also found that there is a correlation between the reduction in top tax rates and the increasing concentration of wealth toward the top of the income distribution. Basically the report, Taxes and the Economy, indicates that supply-side tax cuts have been an enormous failure over the past several decades.
If we continue to use supply side economics to drive our country then we can expect the rich to get richer, the deficit to grow and the middle class to get whatever crumbs are left over.
The organization, Citizens for Tax Justice, does an excellent and nonpartisan job of analyzing tax issues and I would recommend their website to keep up to date on tax issues.
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