Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
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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