As the Earth quakes beneath Us!

I would like to start out by answering a Question put to me in my incomplete, inadequate manner which is my nature at work. The Question asked was How saved taxation in the Past could possibly affect the tax impact of higher taxation in the future. Let Us first start with the normal 97% whose Incomes only matched the inflation rate in the past decade. Some sensible economist somewhere estimated the return of taxes to these Income Earners would reduce the growth of GDP about 1.2%: correct estimate who knows for sure. Revival of the 2000 taxation for those who made the 8% per year gain in the last decade would reduce the GDP about 0.7%. There are Those, including the Obama administration, who believe revival of taxation for these Income Earners are worth the only digital loss of GDP; faced with the Savings in federal debt contracted.

The first statistic could quite possibly be concrete in nature, because it would seem only a natural rise in Income for Labor through the time sequence. I have already suggested a reduction of Sales and Property Taxes by federal program to courteract this effect. The advanced rise in Income for the highest Income Earners does not seem entirely natural, where they earned an approximate 40% ungraded, or 52% graded increase in Wealth over Inflation during the Period of the last decade. This leads me to doubt the last statistic, as I believe there will be no economic disincentive to the increased taxation until the highest Income Earners fall to a relative position equivalent to the normal Income growth of all Labor under inflation. It is only a pretense that such Income levels will reduce their economic efforts because of the taxation; they will increase their efforts to make back the added taxation.

The Obama administration is rumored to be contemplating reduction of tax expenditures now on the books. I find this to be an exceedingly grand idea, and long in delay. It not only eliminates much of the chicanery from the tax system, but will do much to return the higher Income Earners to a normal pattern of Income growth based upon Inflation. I would like here to say that an actual normal pattern return of the higher Income levels will not actually be an economic disincentive even if attained (doubtful); it would require a 3.2% loss to the lower Income Earners for such an economic disincentive to be realized—my numbers, so of course in dangerous territory! lgl