There isn’t enough wealth in the wealthiest Americans to tax and support our government spending.
- Larry Van Horn, associate professor of health care management and the Executive Director of Health Affairs at Vanderbilt University’s Owen Graduate School of Management.
Obama's Soak-the-Rich Tax Hikes Won't Work - Wall Street Journal (via MarketWatch)
The individual income tax brought in 7.8% of GDP from 1952 to 1979 when the top tax rate ranged from 70% to 92%, 8% of GDP from 1993 to 1996 when the top tax rate was 39.6%, and 8.1% from 1988 to 1990 when the highest individual income tax rate was 28%. Mr. Obama's hope that raising only the highest tax rates could keep individual tax receipts well above 9% of GDP has been repeatedly tested for more than six decades. It has always failed.
Federal revenue from the individual income tax exceeded 9% of GDP only eight times in U.S. history—during World War II (9.4% in 1944), the recessions of 1969-70, 1981-82 and 1991-92, and the tech-stock boom-bust of 1998-2001. Revenues were a high share of GDP during the three recessions because GDP fell.
- Alan Reynolds, Senior Fellow at the Cato Institute and was formerly Director of Economic Research at the Hudson Institute.