paying extra just for a label. Related:Do Kids Actually Prefer Name-Brand Cereal to the Cheaper Store Brand Alternative?Avoiding America’s Biggest Rip-offs: Name-Brand PainkillersTax cuts and their consequencesIn a comment to my piece last week on supply-side economics, Dan G. of Milwaukee cast doubt on the forecasts of the Congressional Budget Office: “The CBO can’t make predictions, assumptions, or analysis any better than some far left economics professor shielded from business realities on a college campus,” he wrote. Then he declared:History has shown, every time major individual tax cuts have gone through, tax receipts go up considerably quicker than they did during the preceding period. You can call this “coincidence” if you wish, but there is more to it than that.I didn’t know if this was a “coincidence.” What I really wanted to know was if it was true.I figured Dan would want
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christian louboutin outlet pointy-headed economists out of it, so I simply looked at the last three decades of personal
cheap true religion jeans income tax receipts (taken from this year’s Economic
christian louboutin outlet Report of the President), adjusted for inflation (measured by the Bureau of Labor Statistics). It was just me and a spreadsheet, mano a Excel. Plus a copy of C. Eugene Steuerle‘s indispensable book, Contemporary U.S. Tax Policy, so I could see when the tax
supra high tops cuts happened. Here’s what I found:Several modest tax cuts were enacted in the mid-to-late 1970s. Their impact, however, was swamped by that of inflation, which bumped taxpayers into higher income brackets and made capital gains seem bigger than they really were. So, effective tax rates mostly rose during the decade. Tax receipts dropped 6% in 1975, in part because of a big tax rebate paid that year, but after that increased at a healthy clip–up 12% in 1977, 7% in 1978, and 8% in 1979 before dropping 1% in the recession year of 1980.Then came the sweeping Reagan tax cuts, enacted in 1981 and put into effect over the next three years (the 1981 law
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