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These Bush tax cuts left the following result of Republican tax policies going back to Reagan. The bottom 40% of all income earners now pay no income taxes at all. In fact, they get net payments from the income tax system due to the Earned Income Tax Credit (EITC) and the child tax credit. The middle 20% in income, the true middle class, pays less than 5% of the income tax. The Reagan Republican supply-side tax cuts for the rich actually all but abolished income taxes for the middle class and lower income taxpayers.
The top 1%, by contrast, pays a whopping 37% of all income taxes, while earning only about half as much as a share of national income. Looks like they are paying more than their fair share, actually. The top 10% of income earners pay 71% of all income taxes. Some tax cuts for the rich.
It was Reagan who first proposed the EITC, and the Heritage Foundation that first proposed the child tax credit. These along with the across the board rate cuts from Reagan through Bush are what eliminated taxes on middle income earners and below. The tax rate cuts for “the rich” provided highly successful incentives to take money out of tax shelters and invest in the real economy, resulting in more reported income to be taxed.p>But Huffington dismisses the notion of any incentives from tax cuts, saying, br> /p>
So just imagine you are sitting at the very bottom of the Forbes 400 with an even $1 billion in net worth. Do you think that a few million dollars one way or the other in taxes would make any difference at all in how you conduct your business life? If you’re a highly competent…CEO, would you really pack it in and retire to Boca if you could make only $97 million a year instead of $100 million? Would you really throw in the towel? Similarly, if you’re a lazy heir do you think you’d convert your investments into gold bars and bury them in your backyard just because you might have to pay taxes if you tried to increase your inheritance?br> Amazing. In just one speculative, smart aleck paragraph, Huffington thinks she has blown away hundreds of studies over decades showing that taxes do, indeed, have a major, even determining effect on economic growth, as well as the huge successes of across the board tax rate cuts at the federal and state levels, and the same experiences internationally. Taxes do affect economic decisions at the margin, invest here or there, more or less, expand or contract a business, start a new business, hire or lay off workers, raise wages to attract more workers, or cut back, work longer hours to make money while the economy is hot, or slack off and take a vacation. These decisions at the margin add up to a major impact, and a huge tidal wave over the years.
In reading the words of Huffington and her compatriots at her website, one should remember the words of Jesus Christ, “Beware of wolves in sheep’s clothing.”