Tuesday, February 26, 2013

Spinning on tax cuts

The headline in the paper read "Much of Walker’s proposal would go to top 20%, study says."

This, the ensuing article tells us, "complicates" the notion that Walker has proposed a middle class tax cut.

Not really. The same article points out that 80% of the proposed cuts go to persons making $ 162,000 or less.

Sounds like a middle class tax cut to me.

We saw the same claims made with respect to cuts in the federal income tax shepherded through Congress by President Bush in 2003. For years, we were told that the former President had "cut taxes for the rich" when, in fact, he had cut taxes for everyone. (In fact, the Bush tax cuts were weighted slightly toward lower income taxpayers.)

That this story was, at best, incomplete and, at worst, misleading was ignored until those tax cuts were about to expire at the end of last year. It turned out that getting rid of the tax cuts "for the rich" was going to raise the bejesus out of taxes on the middle class.

Although Walker's political opponents will claim that his proposed cuts are slanted toward upper income taxpayers, the opposite is true. The lower your income, the larger your the of your taxes that the proposal will cut.
Of course, in a world where upper income taxpayers pay the most tax, a reduction in tax rates are going to benefit those taxpayers. As Willie Sutton put it, that's where the money is.
Of course, one can always argue that whatever share that they do pay ought to be higher. In theory, the answer to "how much do you need" can be "how much do you have."
But one may argue, instead, that rate reductions are most likely to lead to increased economic activity because they increase the marginal return on working and investing.

In any event, the Governor has proposed a middle class tax cut.

Cross posted at Purple Wisconsin.


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"Although Walker's political opponents will claim that his proposed cuts are slanted toward upper income taxpayers, the opposite is true. The lower your income, the larger your the of your taxes that the proposal will cut."

What is "the larger your the of your taxes that the proposal will cut" mean? Is it legalese that only Marquette graduates are able to understand? Is this poor sentence structure the insidious work of Obamites, and not you, or an editor?

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