[net.taxes] Reagan Tax Cuts soak the Rich

billp@azure.UUCP (Bill Pfeifer) (04/12/84)

These numbers are from the U.S. Treasury as quoted in today's
Wall Street Journal.

Net Income		% Share of Taxes Paid  % Difference
Group				1981	1982
----------		---------------------  ------------
$0 - 10,000			3.0	2.7	-10.0
$10 - 15,000			6.1	5.6	 -8.2
$15 - 20,000			8.0	7.2	-10.0
$20 - 50,000		       50.0    49.1	 -1.8
$50 - 100,000		       17.9    18.1	 +1.1
$100 - 500,000		       11.9    12.9	 +8.4
$500 - 1,000,000		1.4	2.0	+42.9
$1,000,000 & up			1.7	2.4	+41.2

It worked as predicted!  The figures show that high marginal tax rates penalize
chiefly the U.S. Treasury, not the rich.  The higher the tax rates, the more
likely schemes to circumvent them abound.  In trying to stamp out such behavior
through regulations, the IRS finds itself going dizzy trying to plug six holes
with five corks.  But if you simply reduce the rates to more reasonable levels,
"the rich" find it less costly to pay the IRS than to pay their lawyers.
Tax avoidance drops, more income is reported and receipts grow.

Even Kennedy found that out, when he cut top tax rates from 91% to 77% for
1964, and from 77% to 70% for 1965.  Here's what happened:

Upper Bracket Tax Receipts After Kennedy Tax Cuts
		(in millions)
Year		Tax Bracket
	$0.1 to $0.5	$0.5 to $1	Over $1
----	------------	---------	-------
1961	1,970		297		342
1962	1,740		243		311
1963	1,890		243		326
--- Tax cut : from 91% to 77%
1964	2,220		306		427
--- Tax cut : from 77% to 70%
1965	2,750		408		603
1966	3,176		457		590

SOAK THE RICH!  LOWER THE TAX RATES!

	Bill Pfeifer
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