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Chart of Tax Rates:

http://4.bp.blogspot.com/-qj_ODk3C6aY/TpdCv3jIE4I/AAAAAAAAP1s/WfypezNLkhY/s1600/taxbuffett.jpg

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Junkyard_hawg1985 said...

Wow, the 1%, 5% and 10% tax rates seem to confirm Hauser's law.

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PeakTrader said...

Junkyard_hawg1985, that's an excellent observation.

Many people don't understand, when holding all else constant (no economic period is the same), a high tax rate on the rich has a negative impact on the economy.

There's No Escaping Hauser's Law
NOVEMBER 26, 2010

Federal government tax collections as a share of GDP have moved within a narrow band of just under 19% of GDP.

Why? Higher taxes discourage the "animal spirits" of entrepreneurship.

When tax rates are raised, taxpayers are encouraged to shift, hide and underreport income.

Taxpayers divert their effort from pro-growth productive investments to seeking tax shelters, tax havens and tax exempt investments.

This behavior tends to dampen economic growth and job creation.

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Zachriel said...

Federal tax receipts were below 15% in 2009.

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PeakTrader said...

Zachriel says: "Federal tax receipts were below 15% in 2009."

Yes, that's true.

Since WWII, it has been rare when it fell that low, and it has never risen above 20 1/2%.

Are you suggesting now is the time to raise taxes, particularly for middle and lower income Americans?

In California, hikes in taxes, fees, fines, fares, tolls, tuition, etc. offset federal tax cuts.

That may help explain the state's 12% unemployment rate.

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