Every time I hear a case from people who I would call Democratic Socialists, the Bernie Sanders and Bob Reich's of the World. Talking about returning to the Pre Reagan Tax Rates. I find it very entertaining, because they make the argument that before the Reagan Administration the top Tax Rate was 70%. On the wealthiest americans, so we should return to that rate today and they make the case that things were more equal then and we had more Economic Equality. So we should repeal all the Tax Cuts of the last thirty years, including the Middle Class who are really struggling right now after ten years of Bush Supply Side Economics. What they fail to mention is the economy today is a lot worst off in 2011 then it was in 2000 or 1980. What worked back then so to speak and its hard to make a case that the Tax Rates before the Reagan Administration worked well. I mean does anyone remember the 1970s, I only lived four years of that decade and only remember the late 70s and even then I was just starting what was called then Nursing School, perhaps its called something else now. But that was a real bad decade economically where America was in decline and Japan was on the rise to the point where they had the 2nd largest economy in the World up until a couple of years ago when China passed them. We had two recessions in the 70s with those high Tax Rates and High Unemployment of 7% or higher for the entire decade including 10% in 1979. And of course Double Digit inflation and Interest Rates. To the point by 1978, I believe Newsweek or Time Magazine produced an article is America in Decline. Anyone who loves America should hate that question.
I'm not a conservative or libertarian by any means, I'm not a fan of Supply Side or as Howard Dean a man I have a lot of respect for. Dubbed Borrow and Spend Economics or as a friend of mine on Facebook. Who will hopefully read this blog, knock on wood called BS Economics and no thats not Bob Stewart Economics whoever Bob Stewart is. But as a liberal I'm also not a fan of Tax Increases on the Middle Class who are struggling just to pay their current Tax Rates, if that. I do believe that we have to raise taxes on High Earners to get our deficit and debt under control as well as strategic Budget Cuts. Rep. Jan Shakowski Democrat from Illinois and a Key Member of the Ways and Means Committee has the best plan I've seen to do that. That would raise taxes on High Earners and create new Tax Rates Something like 40% on millionaires, 45% for people making like 100M$ a year, 50% on billionaires. I'm not sure these are the exact rates she's pushing but I'm in the ballpark. While keeping the current Tax Rates for the Middle Class, thats the way to do it without hurting the economy or the Middle Class.
People who support Tax Increases in general, need to understand that Tax Increases effect people especially people with limited income. And raising taxes just to spend more money on government or pay down deficits and debts. Have serious consequences on people who are struggling and can't afford a Tax Increase. Because it means less money for them and less money to spend just to survive.
Click on the link of the blog to watch a video with Bob Reich debating Larry Kudlow on CNBC