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There's No Escaping Hauser's Law (an observation about taxes and incentives)

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There's No Escaping Hauser's Law (an observation about taxes and incentives)

Old 11-30-10, 06:21 PM
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There's No Escaping Hauser's Law (an observation about taxes and incentives)

I would prefer that the government collect 19% of a bigger GDP instead of 19% of a smaller GDP.

Which would you prefer?


http://online.wsj.com/article/SB1000...pinion_LEADTop

There's No Escaping Hauser's Law

Tax revenues as a share of GDP have averaged just under 19%, whether tax rates are cut or raised. Better to cut rates and get 19% of a larger pie.

The Obama administration's budget projections claim that raising taxes on the top 2% of taxpayers, those individuals earning more than $200,000 and couples earning $250,000 or more, will increase revenues to the U.S. Treasury. The empirical evidence suggests otherwise. None of the personal income tax or capital gains tax increases enacted in the post-World War II period has raised the projected tax revenues.

Over the past six decades, tax revenues as a percentage of GDP have averaged just under 19% regardless of the top marginal personal income tax rate. The top marginal rate has been as high as 92% (1952-53) and as low as 28% (1988-90). This observation was first reported in an op-ed I wrote for this newspaper in March 1993. A wit later dubbed this "Hauser's Law."

Why? Higher taxes discourage the "animal spirits" of entrepreneurship. When tax rates are raised, taxpayers are encouraged to shift, hide and underreport income. Taxpayers divert their effort from pro-growth productive investments to seeking tax shelters, tax havens and tax exempt investments. This behavior tends to dampen economic growth and job creation. Lower taxes increase the incentives to work, produce, save and invest, thereby encouraging capital formation and jobs. Taxpayers have less incentive to shelter and shift income.

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Old 11-30-10, 06:37 PM
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Re: There's No Escaping Hauser's Law (an observation about taxes and incentives)

<img src="http://www.virginmedia.com/images/Doogie_Howser_MD_290x400.jpg">
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Old 11-30-10, 06:58 PM
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Re: There's No Escaping Hauser's Law (an observation about taxes and incentives)

we need gdp numbers graphed across that to see if lowering the marginal tax rate impacts gdp
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Old 11-30-10, 07:17 PM
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Re: There's No Escaping Hauser's Law (an observation about taxes and incentives)

Originally Posted by Venusian View Post
we need gdp numbers graphed across that to see if lowering the marginal tax rate impacts gdp
This sounds like a job for wendersfanman. Light the stat-signal!
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Old 11-30-10, 07:45 PM
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Re: There's No Escaping Hauser's Law (an observation about taxes and incentives)

grundle, this is the third time you've started this thread. Surely you must have something better to do.

http://forum.dvdtalk.com/politics-wo...soak-rich.html

http://forum.dvdtalk.com/politics-wo...tax-rates.html
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