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October 18, 2007

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Another important point is that the most significant changes in the tax code were with respect to capital gains and dividend income tax rates.

The reduction in these rates overwhelming benefited the wealthiest and have probably contributed more to increases in wealth disparity than changes in the tax rates on earned income.

I'm not going to argue that income (or wealth) disparity is or is not a bad thing. I'm not going to argue that taxes on passive income should be higher (or lower) out of "fairness".

But there is very little evidence that these changes did anything to impact economic growth or even investment levels - their stated goals.

It's fine to argue that government spending should be less. But reducing taxes has never seemed to reduce spending. And to say that reducing taxes results in more income is just plain "voodoo economics", to quote a former Presidential candidate.

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