I think they should increase estate tax and increase tax on income over $500K. We should increase estate tax to minimize aristocrat class. We should increase tax on highest income while we look for a way to increase middle class jobs. Doesn’t anyone want a society with strong middle-class where everyone earns their wealth? Tax could be used to engineer a society most of us find ideal. Did I hear that right that trade agreements send middle class jobs overseas? Nafta for example helped Mexico become more democratic with stronger middle class and Pacific trade being discussed may do the same for China? If true and if it’s depleting american middle class, we should reexamine.
@ 74,
Thanks for the link. It is kind of interesting that the only time anyone can remember government spending going down (ever so slightly) or staying flat (good enough) is under two democrats (Obama and Clinton).
@ 77,
Cool. You might as well believe the sun isn’t hot or grass isn’t green. There isn’t an “army” of economists are out there disavowing any connection between lower federal income tax rates and economic growth. I’m not suggesting it is a lever, like a light switch, that automatically and instantly works but, come on, good old fashioned common sense could apply here.
@ 78,
That simply isn’t true and no one suggested we go back to the 86 or pre-86 tax law. It would be possible to DECREASE tax rates and DECREASE government spending which would be revenue neutral to the government. Now, to suggest doing that would not be good for the economy can be debated but even without a lot of graphs and charts I think most folks would consider moves like that good for the economy because people who work, invest and earn would get to keep more of what they earn.
GoNoles85,
Reread what I wrote.
What I wrote is true. 
Look up the facts. Look at the estate tax rates in 1987 and look at the brackets.
Look at what cap gains tax rates were then.
There wasn’t a capital gains exclusion in 1987.
There were no Roths.
Government spending was increasing much faster in 1987 than today.
These are facts.
Reagan was a big government spender.
Edit… To be fair …I should adjust for inflation on the estate tax…
I am going to try find more detail for the 1987 estate tax
I am going to keep looking… I want to find the brackets
https://www.cchgroup.com/news-and-insights/wbot2015/historical-estate-gift-tax
A lot of people forget that when the modern version of the US estate tax was put in place in the early 20th century, this was one of the main arguments raised in its favor—and a lot of those making the argument were the hyper-wealthy who didn’t feel it was right for their children to live off the fruits of their parents’ labors and not have to work for it themselves.
Ah, the times, they have a-changed.
Never let the facts get in the way of a good argument. Total government spending increased from $3.2 trillion to $3.8 trillion in Obama’s first year. Has since moved down to closer to $3.5 trillion. I’m not passing any judgments on whether we needed the spending or not, but let’s not pretend the current administration has reduced spending. The earlier article picked a very obscure metric (govt spending directly tied to GDP) as its measurement stick. Looking at headline spending, the amount the government actually spends, would be a little more honest.
http://www.heritage.org/research/reports/2014/12/federal-spending-by-the-numbers-2014
dstark,
No, what I mean is that it isn’t true is your opening sentence where you contend that people want go back to certain provisions in the tax code. That’s the part I am saying isn’t true. I do not question your data. I apologize if I was unclear. When tax law is changed, you know this, you can cut and paste whatever parts you want. We are not forced to go back to anything or forced into anything, we can set government policy to stimulate the results we want.
At least, theoretically.
Serious question, @GoNoles85: How many economists do you know. I mean, like, how many do you know personally.?
If the answer is greater than zero, please go up to him or her and ask the following question: Is there a consensus among economists that lower tax rates result in higher economic growth? Said economist, being an economist, will probably start going on about different scenarios and assumptions and such, but you should insist on a yes/no answer—you presented it as a simple accepted *fact/i, and so you should find out if it actually is.
Then please report back. We’ll be waiting, with popcorn at the ready.
And if you don’t know any economists—not accountants, not financial analysts, actual economists—to ask as a check on your assumptions, well, then this is a chance to make new friends. In addition, you might want to start questioning the basis on which you’re making broad, sweeping claims about things like economic growth patterns being reduced to simple interventions like tax rates, and asking yourself where you’re getting your economic information from, and whether there’s any potential bias involved there.
My point is government spending was increasing faster under Reagan than what is happening today.
This idea that government spending increases are higher under democratic presidents compared to republican presidents is false since 1981. Maybe false if I go back further. I don’t feel like doing that. 
Many taxes were higher under Reagan compared to today.
We don’t agree with what we want.
@GoNoles85 - re post 81 - good ole common sense only goes so far… Which is to say nowhere. Just because a pronouncement sounds logical doesn’t make it true. As a doctor, I have seen common-sense theories get shot down over and over again. And a simplistic statement claiming that lowering taxes has to stimulate economic growth, and raising them harms it, overlooks the complexity of our economic system. Show me convincing, well-analyzed data supporting that claim, and I’ll consider what you have to say. But the data don’t seem to be on your side.
You have to look at spending as a percentage of GDP or you are manipulating the numbers tof support your arguments. Obama’s spending in 2009 were initially at historic levels (relatively close to Reagan’s levels) but the economic disaster he walked into was the worse since the Great Depression. The Great Recession occurred despite the lowest tax rates in almost 65 years.
http://www.supportingevidence.com/Government/fed_budget_as_percent_GDP_over_time.html
Reagan was big on defense spending, not sure if that helps the economy better than just generic government spending. Obama intentionally wants to reduce defense spending and the size of the military. There is an article about it recently. That was his intention all along and he achieved it through the haggling during sequestration with the Republicans. The Republicans didn’t catch it, so it went through.
I don’t know much about other countries’ taxation systems, but my understanding is that in most of Europe, the VAT (value-added tax, a type of consumption tax that taxes the value added to goods and services at every transaction in the chain of production and distribution and is ultimately paid by the final consumer) isn’t a substitute for the income tax, it’s in addition to the income tax. In the UK, for example, the “basic” income tax rate is 20%, and the top rate is now 45% (it was once as high as 98%), subject to various exemptions, though not as many as we have. But in addition to that, the UK has a VAT of 20%; most food (non-luxury food, which obviously creates complex line-drawing problems) and clothing is exempt from VAT, and some other essentials (like household gas) are taxed at 5%. The income tax is the government’s largest source of revenue, VAT third. Second is National Insurance Contributions (NIC), similar to FICA and paid partly by the employer and partly by the employee, or fully by the self-employed, which pays for the national retirement pensions system, disability insurance, unemployment compensation, maternal benefits, etc. Fourth is the corporations tax, a 20% tax on corporate profits. There’s also a national inheritance tax at a flat 40% on estates over 350,000 pounds Sterling, subject to a reduction to 36% based on qualifying charitable contributions, and local Council Tax on the value of real property to pay for services provided by local governments.
Is that simpler or fairer than our system? I don’t know. I think overall UK domiciliaries pay more in taxes than we do, but they also get more in the way of a social safety net which presumably is most valuable to those in lower income brackets. The VAT (consumption tax) is regressive, but that’s softened somewhat by low or zero tax rates for certain essentials, and it’s counterbalanced by sharply progressive income taxes and inheritance taxes with fewer loopholes (well, the inheritance tax looks like a flat rate, but the poor and lower-middle class don’t pay it, and the exemption is more valuable relative to the size of the estate for middle-sized estates than for large ones). The UK’s corporations tax is separate from the income tax, which corporations don’t pay; it looks like more of a flat tax, set lower than our top corporate income rate but with far fewer exemptions and loopholes. So maybe there is more fairness in some ways, but I don’t see a lot of Americans who complain about their taxes lining up to relocate to the UK, because the overall tax burden is higher there, probably at all levels of the income scale.
@ 87,
I know 3 personally. And I will ask them but I won’t be able to “report back” to you anytime soon so don’t go to Wal-Mart and get the popcorn just yet please. We are on break until Aug 31 when classes start again. The three I know are in my hallway but I don’t see them every day since everyone teaches online so much now.
The three economists I know personally are not researchers. Sorry. They teach at the basic level in their fields, just like I do, but hopefully that is good enough. After I ask them your question, and I’m going to write it down word for word, I don’t want to mess it up, I will then ask them if government spending causes the economy to grow. I am sure they will say that is one factor amongst many which is what I would say.
I don’t recall opining it is “fact” or a perfect correlation but I don’t feel like I am very far out on a limb when I say as income tax rates go down that encourages people to work, invest and earn because they keep more of their earnings. It might not happen immediately either but it is a factor, just like government spending, if you disagree please let m know because I’ve got some popcorn ready and I plan to eat it while reading your reply. Now, don’t run away and hide.
One also has to take into account the Federal Reserve beginning to steadily lower the interest rates in the 80’s which allowed for cheaper borrowing by both individuals and businesses - from 20% to 9.5% (Fed fund rate) and 14% to 9.5% (discount rate) from May '81 to Oct. '82.
GoNoles85,
Are you teaching the Laffer Curve?
@ 92,
Very interesting and informative post, thanks!
@ 94,
Yup. How the market rate of interest was at or near 20% in the 80’s is mind boggling. Here again, there are LOTS of factors that affect economic growth. One of them is the tax rates on income.
We don’t need charts or data to prove that, it is obvious.
No. That is not obvious. Depends what you do with the tax receipts and what the tax rates are.
@ 95,
No.
Economics is not my field.
I know enough to be dangerous.
And what the government does with tax receipts is a separate issue to how lower tax rates give people more incentives to create earnings.
Lower tax rates may have the opposite effect right?
If I need xxx dollars and the tax rates make it easier to achieve, I may work less right?
There is more to life than making money.
I want to thank Ronald Reagan, who I voted for twice, for cutting tax rates, and giving my industry tax breaks, so I could work less.