Will Taxes on The Rich Pay for ObamaCare?

This is Alan Reynolds writing today in the WSJ:

The president intends to squeeze an extra $1.2 trillion over 10 years from a tiny sliver of taxpayers who already pay more than half of all individual taxes. It won’t work… Punitive tax rates on high-income individuals do not increase revenue.

The maximum tax rate fell to 28% in 1988-90 from 50% in 1986, yet individual income tax receipts rose to 8.3% of GDP in 1989 from 7.9% in 1986. The top tax rate rose to 31% in 1991 and revenue fell to 7.6% of GDP in 1992. The top tax rate was increased to 39.6% in 1993, along with numerous major revenue enhancers such as raising the taxable portion of Social Security to 85% of benefits from 50% for seniors who saved or kept working. Yet individual tax revenues were only 7.8% of GDP in 1993, 8.1% in 1994, and did not get back to the 1989 level until 1995.

Comments (6)

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  1. Larry C. says:

    Excellent post. Surely the Obama Administration can learn something from the experience of the past quarter century.

  2. Tom H. says:

    Why doesn’t the CBO put an end to this type of wishful thinking by refusing to score higher marginal tax rates on the highest income earners as revenue raisers.

  3. Ken says:

    I saw the editorial first thing this morning. It was an eye opener.

  4. Joe S. says:

    Great editorial. Should have been published before the vote in Congress. Although that probably would not have changed any votes.

  5. Laurence Brody says:

    Did anyone ever think that the goal was to create more unemployed to justify addtional taxation?

    According to Historian Will Durant in his chapter on Socialism and History in his readable book, The Lessons of History,” all great empires deteriorate into Socialism. The $10 book is worth reading. Also the history of socialism is well known. You want to weaken the masses into submission to gain their assets….farms, businesses products.

    I think that action has commenced. This is not a cost saving action. Also socialism has to be run by a dictator. Its pretty clear to me, the issue is far beyond health care. If you die waiting for urgent care, too bad, your estate (taxes) will be good fodder for government.

  6. Bruce says:

    Has anybody considered that maybe Obama wants a continuing economic crisis, so he can continue with his collectivist agenda?