US Tax Rates (Taxes on riches/wealth)
US Tax Rates (Taxes on riches/wealth) (Photo credit: mSeattle)

What would you think if a nonpartisan branch agency of the Library of Congress — a public policy research arm of Congress — came out with the following analysis?

“(C)hanges over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie.

“However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. As measured by IRS data, the share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. At the same time, the average tax rate paid by the top 0.1% fell from over 50% in 1945 to about 25% in 2009. Tax policy could have a relation to how the economic pie is sliced—lower top tax rates may be associated with greater income disparities.”

Now, what would you think if public disclosure on that analysis from the Congressional Research Service was squashed by Senate Republicans because of concerns over its findings, which argue against everything their party has been preaching about supply side economics since the Reagan era?

Would that look a bit suspicious, seeing as how the report came out in September — too close to Election Day for Republicans’ comfort — and is only now being brought out in the full light of day?

Well, guess what … it’s happened.  Click on the link below for the New York Times’ report on this story.

NEW YORK TIMES:  Nonpartisan Tax Report Withdrawn After GOP Protest

The actual CRS report can be found at the link below.

Taxes and the Economy:  An Economic Analysis of the Top Tax Rates Since 1945


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