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65 Years of Tax Cuts for the Wealthy Created Record ‘Inequality’ Not ‘Prosperity,’ says Report | Common Dreams

September 20, 2012

Some excerpts:
“The report,
Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945, found that “the reduction in the top tax rates have had little association with saving, investment, or productivity growth. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.””

“[The CRS report] jibes with other recent studies that show little relationship between the top tax rate and economic growth. A new analysis by Owen M. Zidar, a former staff economist on President Obama’s Council of Economic Advisers and a graduate student at California-Berkeley, found that “a one percent of GDP tax cut for the bottom 90% results in 2.7 percentage points of GDP growth over a two-year period. The corresponding estimate for the top 10% is 0.13 percentage points and is insignificant statistically.” GDP growth, business investment, and a host of other economic indicators were all stronger during the 1990s, after taxes were raised on the rich, than during the supply-side eras of Presidents George W. Bush and Reagan.”

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