interesting article on tax rates.

[Charles Dean]

This is something I've thought about, but never really done any research on.

The times when we had the most growth and prosperity across the board in our country was when tax rates were higher. During the 50's and then during Clinton. I think this is an interesting read.

http://www.alternet.org/workplace/10697 ... age=entire

[k2000k]

The 1950's was a period when America had emerged a very strong nation after a world war had ravaged the rest of the world and coming off almost 30 years of heavy investment in our infrastructure. The economy prospered despite high taxes, not to mention a lack of competition in many industries that we now are fighting to stay afloat in.

[WestSideBilly]

I've been trying to digest this for a couple days. Some of it is intuitive; much of it is not.

[Charles Dean]

It's an interesting read and an interesting theory for sure.

[Charles Dean]

[rose-colored-coolaid]

The most interesting assertion from the article seems to be that very high taxes for the rich encourages reinvestment as opposed to destroying a corporation to pull out all the money now. Perhaps that's especially true if you remember when taxes were higher.

It sounds very counter intuitive, but perhaps fiscal conservatives are nearly as wrong as social conservatives... You can definitely argue the massive tax breaks on capital gains have not help matters. I'm going to need to think on this a little more.

[Charles Dean]

And that's the most interesting thing about his theory is that he's not necessarily saying that raising taxes and giving more money to the government is what is good. It's that the higher taxes make businesses work differently. That it forces them to not take profits, but to reinvest that money to make their businesses stronger and better.

That is of course one of the main problems with our banking collapse right now is that financial institutions traded good long term stability for short term high risk gains. Is this a way to force execs to run a business in such a way to where the long term steady growth and value of the company is paramount to short term bonuses and gains?

I've been thinking on this for the last couple of days. It's a very interesting idea.

[WestSideBilly]

Something I've often mentioned in regards to the GM/F/C debacle is that in the 80s, there was a corporate culture shift away from long term viability into maximizing quarterly profits*. In the early 80s, they routinely kept 1-2 years of operating revenue as cash on hand. That shifted into using that cash to buy high risk/high reward assets, other companies, etc. I can't help but think that a part of this was the significant decrease in tax rates during the 80s.



* This was largely true of all corporations in the last 25 years.

[Charles Dean]

That's something I'd never heard before Billy. Very interesting.

I know individual savings are also way down from where they were since 1980. Can't remember the source offhand, but personal savings for individuals in 1980 was around 10% annually. Now, on average people save -.5% of what they earn.

[FreedomLover]

[Lake Hills Renter]

I'm pretty happy with my 46" LCD TV. But then, it was the first TV I've bought in 10+ years and I could easily afford to pay cash for it. It's also one of the few "gadgets" I've bought. Nice for watching movies or playing XBox. But it was a treat for myself, not an expectation.

[rose-colored-coolaid]

[WestSideBilly]

She's happy, and you could piece that outfit together for $10, tops.

[Charles Dean]

Seriously. You think Olivia Neutron Bomb wasn't a happy woman?

[rose-colored-coolaid]

I was just looking for a picture of the clothes. Sure people were happy in the 80s. And they were happy during the great depression, and during the middle ages and during the stone age.