Re: Tax

Michael Lorrey (
Thu, 05 Feb 1998 19:19:41 -0500

Damien R. Sullivan wrote:

> On Feb 5, 5:42am, wrote:
> > The "trickle down" Reaganomics theory for less progressive taxes has already
> > failed once. See for a cogent
> If tax rates are 0%, taxes are 0. If tax rates are 100%, taxes are 0,
> because no one's bothering to work. So there's some curve relating
> rates and revenues. If rates are below the optimal rate, then raising
> rates will increase taxes; if above the optimum, then the rates are
> being a net disincentive, and should be lowered. Essentially
> supply-side ("voodoo economics" according to candidate Bush) stated that
> we were above the optimum. Apparently this was not the case.

As stated below, today's economy is not the same as the economy of 1980. That the 20%
cut in income taxes led to the largest spurt of growth in the postwar era is not
debatable. That we needed deficit speding to soak up the dollar supply overseas that
had been accumulating during the postwar gold standard era in order to kill
inflationary trends that began after Nixon let the nation loose from the GOld
Standard is also widely accepted. That the huge defense buildup of the early 80's
financed the computer industry to a viable status, to which we now owe our present
incredible gains in productivity (which is what is paying all of those increased tax
revinues) is also not debatable... A very good case can be made that we owe our
present economic vitality in large part to the economic policies of the Reagan era. I
notice that countries (and liberal controlled states here in the US) that laughed at
Reagans economics are now still rather behind the average US economic performance.

Also note that Reagan's policies of deregulation, which he was not very successfull
at due to a democrat controlled congress, have gone very far to help the economy as
well, now that a Democrat president has jumped on the deregulation bandwagon....

> > "trickle down" resulted in real dollar decreases in the incomes of the lowest
> > 60% of American society. During the 1960s when the tax system was decidely
> > progressive (with the highest marginal tax rate exceeding 70%) all portions of
> > American society experiencd real wage growth. And what about countries such as
> Don't know if I can buy this. There are some differences in the world
> economy between the 60's and the 80's.

Its false. It is based on government inflation statistics which even Greenspan has
acknowledged were hopelessly wrong. If inflation is reported to be higher than it
really is, then, by the reported statistics, wage growth that keeps pace with real
inflation is seen to be declining wages. The stats in the 80s also completely ignored
the increase in the average standard of living on a systemic basis due to advances in
technology in the home....

> > unreasonable that the ones who reap the most from the American system pay a
> > higher portion (though still retaining ample amounts unto themselves) in return
> My problem is that the biggest expenses are welfare for old folks.
> Defense, welfare for poor people, and other things, don't add up to that
> much; it's SS and Medicare which dominate.

Its been estimated that entitlement liabilities the government owes to retirees will
exceed the entire federal budget sometime around 2015-2020. No money for pork,
defense, education, children, foreign aid, research, etc. The US government will be
owned lock stock and barrel by the AARP, and we'll all be wage slaves to the
oldsters. I'll be turning 50 in 2018, so maybe its not such a bad thing for me, or
anyone else over 30 right now, as we'll be in the ruling party.

When this happens, kids won't just be killing other kids, they'll be taking out
retirees, while the AARP will be having lynchings of teenage punks.

   Michael Lorrey
------------------------------------------------------------ Inventor of the Lorrey Drive
MikeySoft: Graphic Design/Animation/Publishing/Engineering
How many fnords did you see before breakfast today?