Again I see in a letter the straw man phrase “Republican trickle down economics.” Thomas Sowell’s essay “Trickle down theory and tax cuts for the rich” has the answer. I will quote one paragraph. Note these figures are not adjusted for inflation.
“The facts are unmistakably plain, for those who bother to check the facts. In 1921, when the tax rate on people making over $100,000 a year was 73 percent, the federal government collected a little over $700 million in income taxes, of which 30 percent was paid by those making over $100,000. By 1929, after a series of tax rate reductions had cut the tax rate to 24 percent on those making over $100,000, the federal government collected more than a billion dollars in income taxes, of which 65 percent was collected from those making over $100,000.”
They cut the top tax rate by two thirds, and tripled the tax revenue from that tax bracket, while the revenue from lower brackets fell by a third. How? They changed the investment incentives. I strongly recommend Sowell’s essay for anyone interested in a fuller explanation.
Kenneth Ballard, Boise
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