Friday, November 20, 2015

A Refresher on Marginal Tax Rates and Revenue

I'm pretty sure Bernie Sanders and Hillary Clinton were alive during the 1980s, so this shouldn't be necessary. But just as a refresher to them (and to those who weren't around then), let's review. In 1980, the top marginal tax rate was 70%. A few years later, Congress reduced the top rate to 28%. The chart below shows what happened to Federal Income Tax revenue from those in the top tax brackets. These aren't opinions; they're hard facts.

Now Bernie and Hillary are stumping to raise rates back to the high levels of 1980. To what end? To reduce the amount of tax the government collects? To reduce the number of people reporting high incomes? To prove, once again, that the Laffer Curve is quite real?



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