(National) Taxation Solution(s) Discussion 2022

Kansas residents have first hand experience with where the GOP agenda leads. While Brownback was governor, they instituted GOP supported tax cuts and austerity measures (and the creation of tax loopholes) pushed by Arthur Laffer and Grover Norquist.

The result? Economic nightmares. Low economic growth. Basically it illustrated perfectly, what every critic of GOP fiscal policy claimed it would do. I have to imagine this left some level of imprint on the residents of Kansas, making them less extreme in their support of the GOP. But I could be wrong, I do not live there.

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It was so extreme and such a failure they elected Democrat as Governor for the first time since the Great Depression if I recall correctly. Granted the Democrat was a former moderate Republican but still.

I do not live in Kansas either.

Our governor race in KS is tight. We had a dem prior to Brownback. Before that, a repub, before that, a dem.

Some folks still defend it, but most people consider ‘the Kansas experiment’ to be an abject failure.

I think it made a very strong case against Laffer, tax cuts definitely did not appear to pay for themselves.

Well, The Laffer Curve is true. Just simple math.
It’s just that no one really knows where we are on it.
Laffer himself (tax-cut proponent) always suggests that we are to the right of the peak, while it’s quite possible that we are on the left.
Also, cutting specific taxes on some (rich) and not others (less rich) is the real culprit.

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It’s almost impossible that we are to the right of the peak. Every tax cut in my lifetime has resulted in less governmental income. It takes some level of delusion (yes, I think this applies to Laffer himself) to still think we are to the right of the peak.

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Ah I see. I must have been confused with some other state or race.

That’s not an argument against Laffer AT ALL. That’s just saying that pre-cut, Kansas was not at a place on the Laffer curve where a tax cut would result in increased revenue. Which is actually most points on the Laffer curve. And probably ALL points on the Laffer curve currently occupied in any taxing jurisdiction in the United States.

A marginal tax rate of 90% (the federal marginal tax rate when Laffer was advising Reagan) is pretty radically different from a marginal tax rate of less than 10% (nearly all state tax rates).

Right. I didn’t mean to imply the whole idea was wrong. But the way it got sold is we WERE on that part of the curve, so let’s cut taxes and it’ll raise tax revenue. We are on the same page I think.

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And even that failed.

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It was 90% until JFK reduced it to 70%. The Economic Recovery Tax Act of 1981 reduced the highest rate from 70 to 50 percent, and indexed the brackets for inflation.

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Gotcha. That was almost certainly bunk.

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Oh that’s right. In his autobiography Reagan talked about paying 94% of his marginal income in taxes, but he was probably including FICA and California taxes in that calculation.

He commented that he’d get asked to do a movie and it would pay $100,000 but it wasn’t worth $6,000 to him so he wouldn’t bother and the movie wouldn’t get made. Which of course is exactly the sort of thing that Laffer was talking about.

It was 94% during WW II. Shows what kind of patriot Reagan was. Most guys his age were risking their lives to fight for the country. Reagan didn’t want to make a movie because he would have to pay too much in taxes.

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Yeah, dropping it from 70% to 50% probably wasn’t enough. When they dropped it to 38.5% for the 1987 tax year, hoo baby, things took off.

https://www.whitehouse.gov/wp-content/uploads/2022/03/hist01z3_fy2023.xlsx

It’s been long enough since I read his book that I don’t recall the era he was referring to. You might be right, in which case his net was even lower than that as he would have had to pay California income tax on top of that. Back then his marginal FICA rate was 0%, so that wouldn’t enter into the equation.

More likely he was already losing his mind and/or full of shit.

Only thing that makes him one of the “greatest republican presidents” is just how completely dogshit all except Lincoln were.

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I can’t believe we are sitting in 2022 amd people are still trying to spin the longterm damage Reagan did to our country as a good thing.

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Did he not want to pay taxes, or was the marginal income just so small that it wasn’t worth the marginal effort?

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Don’t know if you are being sarcastic when you say things took off. For the six years following the tax cut individual income tax revenues grew at an annual rate of 5.3%. Over that period prices grew at 4.2% and population grew at 1.1% so per capital income tax receipts in real terms were effectively flat.l

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