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Thank you for your well thought out response, and for the link to the CBO article, which I thought was very good.  (BTW, I hope that fire worked out OK--the ole empty fire extinguisher trick again.)  It's too bad that we can't, in economics, hold all other variables constant, and analyze an issue.

While supporting the CBO article, I would make two comments.  First, I believe that the article uses today's tax structure for its analysis, looking at the Federal Income Tax only--which is appropriate BTW.  That means they are starting with a highest marginal tax rate of 35%, where my intuition (no data, just intuition) tells me marginal rates are already pretty low, and I wouldn't expect to get much revenue increase out of it.  I would agree with an earlier comment of yours, which if I'm understanding your meaning, said that it seemed logical that there was a significant revenue benefit from the JFK tax cuts--because the marginal tax rates were so much higher, and the benefits so much greater.

You comment:

(I think I'm probably a little more in favor of lower taxes than most people on here, since I don't think income tax rates should ever exceed the 40-45% range.)
I'm in agreement with your feeling on this point.  And this is just an observation: for those living in California their total marginal tax rate on income is in the middle of your range--35% + 9.3% +1.2% - 3.3% = 42.2% (federal tax + state tax+ medicare tax - benefit of deduction for state tax).  Now of course one does not have to live in CA, NY, or other high state tax states.  But just pointing out that a number of high income tax payers are on a higher marginal tax rate, in reality.

But I'm in agreement with the analysis which I interpret as saying at the lower marginal tax rates of today (2000 and forward), you will not increase tax revenues by lowering marginal tax rates.  Another of Bush's programs that I would disagree with is eliminating the estate tax--raising the ceilings makes some sense, reflecting the impacts of inflation, and maybe then some--but there are really no benefits to elimination.

by wchurchill on Sat Jan 7th, 2006 at 03:05:30 PM EST
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The fire wasn't too terrible.  My neighbor burned his hand a bit, but no serious damage.  He was more shocked than anything.  The outside walls on the back of the buildings have plastic covering, and those were completely burned away in some parts, but the overall structure seems fine.

I would agree with an earlier comment of yours, which if I'm understanding your meaning, said that it seemed logical that there was a significant revenue benefit from the JFK tax cuts--because the marginal tax rates were so much higher, and the benefits so much greater.

I'm not positive about this, but I believe marginal rates, prior to the JFK cuts, were 90%, which is (in my opinion) just absurd.  It's the case that Republicans always point to, but 39% marginal rates -- I believe 39% was roughly the Clinton-era rate -- are, of course, not comparable to 90% rates.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sat Jan 7th, 2006 at 04:47:35 PM EST
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