- Does lowering income taxes always temporarily boost unemployment, only to have things crash down a few years later?
- Do high income taxes really ensure a low unemployment rate?
- Unemployment data, provided by Ron (http://www.bls.gov/cps/cpsa2009.pdf)
- Top Bracket Income Tax Rates (http://www.truthandpolitics.org/top-rates.php)
- JFK era stock market prices (http://www.tigersoft.com/Tiger-Blogs/7-22-2007/index.htm)
Ron claimed that we had somewhere between 25 and 30 years of 5% unemployment with the maximum tax rate at around 88% to 91%. In looking at the Top Bracket Rates, I cannot see a period like this, unless we go back to 1938 (during which time, we had high unemployment), or look forward to beyond the Kennedy years (when we had a tax cut to about 77%). Either way, I'm not satisfied that Ron is correct in his claims; nor am I satisfied, however, that I have enough data to see what's really going on.
Indeed, Ron never answered my question: If the economy was doing so well, why did President John F. Kennedy see a need to justify a tax cut to increase revenue? I don't have a satisfactory answer, one way or the other, either--the JFK era stock market link above was one effort to find an answer.
- Ludwig von Mises claimed that interest rates, when forced too low, creates bubbles in the economy.
- John Maynard Keynes claimed that bubbles were caused by "animal spirits", and that government taxing and spending can correct for problems caused by fear and greed.
- One recent claim I've heard on the radio is that taxes--all taxes, put together-- have always represented 20% of the GDP.
- The strengthening of unions often results in unemployment.
- Minimum wages cause unemployment.
- Businessmen can be cowed by the actions of government--especially by "frivolous" criminal charges and civil lawsuits.
- Unemployment rates, and how they are calculated or estimated.
- Interest rates, and ways to estimate what the "market rate" would have been without government intervention.
- Events, major and minor, that may have affected the economy--such as war, the prosecution of prominent businessmen, or Supreme Court decisions.
- The values of the individual components that are used to calculate the GDP.
- Stock market prices.
- Taxes, taxes, taxes! Income taxes--and not just the top rates!, tariffs, sales taxes, corporate taxes, State and local taxes, fees, even fines.
- The number of laws in effect, and the number of regulations put into effect by regulatory agencies.
- Anything else that might be relevant in looking at an Economy.
Perhaps this call for data is stupid: we are, after all, talking about a chaotic system (the United States economy), much of the data I'm requesting has to be estimated, and we have so little time to look back on (the income tax, for example, is only 100 years old!). Even so, it wouldn't hurt to take a stab at looking at these claims, even if, in the end, we can't come to any solid conclusions.