How to “Soak the Rich,” Keep Tax Rates Low

I'm in total SHOCK!  The Tennessean newspaper has endorsed Mitt Romney and Paul Ryan, today.  

Why?  It is because according to the Tennessean, the economy is paramount. According to the Tennessean,  It's 'Time for Another Change.'  They go on to say, America needs strong leadership; yet, our leaders in Washington have seldom looked more impotent.  

One of the key ways to build this economy again, is to keep tax rates low.


During the vice presidential debate between Congressman Paul Ryan and Vice President Joe Biden, Ryan said Republicans would work with Democrats in Congress to lower federal income tax rates 20%, while denying many existing deductions used by taxpayers. He defended Romney against charges he will not specify the deductions he would target.

"What we're saying is here's our framework,'' Ryan said.

Biden said the GOP ticket will keep loopholes for wealthy investors by taxing capital gains at lower rates than regular income. He said Ryan's proposal, to lower rates and still preserve some deductions, was "impossible'' to achieve without raising taxes on the middle class or growing deficits.

Here is a part of that dialogue:

Ryan. It is mathematically possible. It's been done before. It's precisely what we're proposing.
Biden. (Chuckles....showing all pearly whites) It has never been done before.
Ryan. It's been done a couple of times, actually.
Biden. It has never been done before.

Well, here are two examples of when the tax rate was lowered and revenue increased.


Results of Lower Taxes Paid in 1980 & 1988

There’s lots of data here, but pay close attention to the columns on the right and see how much income tax was collected from the rich in 1980, when the top tax rate was 70 percent, and how much was collected from the rich in 1988, when the top tax rate was 28 percent.

The key takeaway is that the IRS collected fives times as much income tax from the rich when the tax rate was far lower. This isn’t just an example of the Laffer Curve. It’s the Laffer Curve on steroids and it’s one of those rare examples of a tax cut paying for itself.

I have confidence that we can teach folks on the left that tax policy affects incentives to earn and report taxable income. 

Results of Lower Taxes Paid in 1964

In 1964 Congress passed, and Lyndon Johnson signed into law, a big income-tax cut that had originally been proposed by John F. Kennedy. The top marginal rate dropped from 91 percent to 70 percent, which represented a 23 percent cut. The bottom rate dropped from 20 percent to 14 percent, which represented a 30 percent cut. The middle rates dropped from 59 and 62 percent to 45 percent, which represented a cut of 24 percent to 27 percent. So we start out with one significant difference between the Kennedy and the Romney plan. Romney and Ryan want to lower taxes by the same amount for all brackets, high and low. Kennedy (really, Johnson) lowered taxes more at the middle and especially at the bottom than he did at the top.

In each case, the end results were a restoration of economy freedom and additional revenues.

Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence ~ John Adams.

Will these facts have a bearing on the upcoming election?  We may know the answer to this question on November 7, 2012...unless we have a repeat of the Bush v Gore 2000 presidential election.

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President Obama is Still a Very Popular President! Find out Why.

Why the Obama bubble still hasn't burst

How is it that, after almost four years of terrible economic results that Obama's persona is not more tarnished?

Can the same thing happen in politics? Can a skilled politician, who has become popular with soaring rhetoric and promises, deflate when it starts becoming clear that he is not going to deliver?

Of course, I am thinking about our president.

Mitt Romney demonstrated in the first presidential debate that the considerable gap between President Barack Obama's rhetoric and his performance makes him a vulnerable candidate.

Yet, the president's bubble is far from bursting.

Romney, in the debate, was aggressive but deferential toward Obama. He was deferential because, despite the poor state of the country after almost four years of the Obama administration, Barack Obama is still a popular president.

Recent polling shows his approval remains around 50 percent. At similar stages in the presidencies of the last two presidents voted out after one term, George H.W. Bush and Jimmy Carter, their popularity ratings were in the 30s.

What accounts for Barack Obama's Teflon? How is it that, after almost four years of terrible economic results -- high unemployment, sluggish growth, huge deficits and mounting national debt -- that Obama's persona is not more tarnished?

Shouldn't today's economic facts on the ground be sufficient to puncture the Obama bubble?

One part of the answer to this puzzle is the changing demographics of the country.

The United States today is a nation that is much less white, much less married and less traditional than it once was. These are growing trends and each reflects in at least some large part constituencies with values supportive of Obama's worldview -- activist government and moral relativism.

What was once the exception to the rule in America -- not being white, not being married, not having traditional views on family, sex and abortion -- is now becoming the rule. And these constituencies are becoming sufficiently large to elect a president.

National Journal released a poll right before the debate showing Obama and Romney dead even nationwide -- 47 percent each -- among likely voters.

The poll shows Obama's white support at just 38 percent.

Obama was elected in 2008 with 43 percent of the white vote. It appears that he could be re-elected with even less.

In Gallup's polling of last week, Obama's approval among white voters stood at 39 percent.

He gets 38 percent approval among those who attend church weekly compared to 55 percent among those who attend church seldom or never.

And his approval among married voters is 40 percent compared to 57 percent among those not married.

According to data compiled by the Tax Foundation, the large majority of those now filing tax returns in the United States are single. In 1960, 65 percent of all tax filers were married and 35 percent single. In 2010, it was reversed -- 61 percent of filers were single and 39 percent married.

When Obama pushes for taxing the rich, he's not just pitting those with the highest incomes against everyone else. He's pitting married against singles. Eight of 10 tax filers in the top 20 percent of earners are married. The majority of filers at the middle income and below are single.

It's really a cultural divide, one you can be sure that Obama is very aware of, that is keeping his bubble inflated.

The fact that Obama's support is still this strong despite his terrible record sends a clear warning to those looking for a new birth of American freedom.

Romney and Rep Paul Ryan should consider taking these constituencies on directly -- blacks, Hispanics, singles -- and explaining why America's future hinges on shutting down the government plantation.

Star Parker         

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