Word: taxed
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Dates: during 1980-1989
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...wipe out the deficit is to grow our way out of it. Hold the line on Government spending while the economy grows and gradually throws off more tax revenue. Money for new programs should come from trimming waste from old ones...
This is tricky not just because it's politically unpalatable. Even for a dictator it would be tricky, because raising tax rates does not necessarily raise more revenue. Raise capital-gains rates to 100%, say, and far from raising more tax revenue you would raise virtually no tax revenue: no one would sell anything in which he or she had a profit; he'd just hold on until some sensible politicians came along and lowered the rates.* Impose a tax on securities transactions, and you simply drive the securities business to London and Tokyo. Ultimately, you'd only enrich...
...easy. And the popular thing ("Let's stick it to IBM, they can afford it!") is not always the smart thing (taking money from IBM for Congress to spend presumes Congress can spend it more effectively than IBM). What's needed is tax hikes that, first, would actually raise more revenue, and, second, are so fair and just and sensible they virtually scream to be introduced...
Here are four. They should be enacted as a package. Together they'd raise $40 billion in taxes, cutting the deficit by nearly a third. The lower interest rates that would probably result would cut the deficit still further -- and keep the economy rolling to take some of the sting out of the tax hikes...
First, raise my taxes. Under the current tax law, the top federal income- tax bracket is 28%, but above $43,150 (or $71,900 for joint returns) it effectively rises to 33% for a while and then drops back to 28%. Don't misunderstand. I love paying just 28%. (And at 28%, I pay a heck of a lot more than I ever did when the top rate was higher, because, far from trying anything stupid to shelter my income from taxes, I'm quite happy to send the Government its share.) But keeping the top rate at 33% instead...