Here is a little bit of analysis from the Motley Fool. If you compare the top marginal income tax rate to average unemployment and average GDP growth over time, HIGHER marginal tax rates tend to lead to LOWER unemployment (more jobs) and HIGHER AVERAGE GDP growth. That’s just the opposite of what any Republican/Tea Party conservative would want you to believe. Take a look at these numbers.
Time period Avg Max tax Avg Unemployment Rate Avg GDP growth
1947-1950 83% 5.00% 5.13%
1951-1963 91% 4.86% 6.33%
1964-1981 71% 5.62% 9.46%
1981-1986 50% 8.20% 7.55%
1987-1992 31% 6.15% 5.94%
1993-2003 39% 5.28% 5.10%
So, if you really wanted to create jobs and grow the economy, what would you do? You would INCREASE the top marginal tax rate NOT lower it as Republicans want to do.
How could that be? Here is what the Motley Fool thinks:
As I thought about it more, it made more sense to me. If I own or run a business, I have a choice of taking the profits out of a business as income or reinvesting it in the business to grow it further. If the marginal tax rate is high, there is an incentive not to take the income and therefore an incentive to grow the business: to hire more people, to buy more equipment, etc.
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