Tax Rates and Tax Revenue As A Percent of GDP

The discussion about the Fiscal Cliff and taxes got me thinking today.  Does tax revenue TRULY increase when you reduce taxes?  Many Conservatives point to the Reagan tax slash and revenue increase that occurred in the 80's but Liberals will claim that it merely followed the rate of inflation.

So I went out to look at details, and found some surprising results.

First I wanted to see if you raise taxes, does the tax revenue REALLY change?  So I thought, "What is a good stable comparison to measure tax rates against?"  The comparison I came up with was Tax revenue as a percent of GDP, and this is what I found;

What I noticed was that as a percent of GDP, after 1950, regardless of the tax rate, the tax revenues as a percent of GDP was stable around 18%, even when Reagan slashed taxes.

I was just about to post that information when I thought of a rebuttal; "Well, that doesn't account for the growth in GDP created by lower taxes!"  So, I looked that up as well, and I found this;

Looking at the major changes, the Reagan cuts did boost the economy from in the red to 5% and about 7% growth, but quickly fell back to 5% the next year followed my modest 3% GDP growth years following that. The real confusing stats are looking at the cuts in 1968 and around 1988 when the rates were slashed, but GDP soon fell to 0% growth, and in the 90's when Clinton raised taxes and GDP grew at between 4% and 5%.

At best what I can conclude is this;

Cutting taxes may or may not raise both GDP and total tax revenue, but the growth is strictly short term, and regardless of what you put the income tax rate at, the government is only going to haul in about 18% of GDP.  From that, this whole bit about soaking the rich isn't going to make a difference.  The wealthy will simply find a way to prevent their money from going into the government coffers.

The real money maker?  Cutting spending.

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RGIII Overreaction?

There's been a lot of news lately about Rob Parker's comments on RGIII.  People saying Parker is a racist because of this line;

"“Well, [that] he’s black, he kind of does his thing, but he’s not really down with the cause, he’s not one of us.  He’s kind of black, but he’s not really the guy you’d really want to hang out with, because he’s off to do something else.”

Why is that your question, Parker was asked.

“Well, because I want to find out about him,” Parker said. “I don’t know, because I keep hearing these things. We all know he has a white fiancée. There was all this talk about he’s a Republican, which, there’s no information [about that] at all. I’m just trying to dig deeper as to why he has an issue...

 I've noticed a trend of selective hearing with news agencies.  They take the 5 second clip that they want to get a reaction from, and completely disregard the rest.  At first it was Ann Coulter who was notorious for doing this, then radio hosts Rush Limbaugh and Sean Hannity have turned their shows into a farce with the same tactic to get ratings (which is why I don't even bother listening to them anymore), and no doubt will be all over this screaming at Parker.

However, read what Parker said immediately after, and the conversation becomes clearer;

...Because we did find out with Tiger Woods, Tiger Woods was like I’ve got black skin but don’t call me black. So people got to wondering about Tiger Woods early on.”

Then Skip Bayless asked Parker about RGIII’s braids.

“Now that’s different,” Parker said. “To me, that’s very urban and makes you feel like…wearing braids, you’re a brother. You’re a brother if you’ve got braids on.”

Then Stephen A. Smith was asked for his take. He exhaled deeply.

“Well first of all let me say this: I’m uncomfortable with where we just went,” Smith said. “RGIII, the ethnicity, the color of his fiancée is none of our business. It’s irrelevant. He can live his life any way he chooses. The braids that he has in his hair, that’s his business, that’s his life. I don’t judge someone’s blackness based on those kind of things. I just don’t do that. I’m not that kind of guy.
“What I would say to you is that the comments he made are fairly predictable,” Smith went on. “I think it’s something that he may feel, but it’s also a concerted effort to appease the masses to some degree, which I’m finding relatively irritating, because I don’t believe that the black athlete has any responsibility whatsoever to have to do such things.
“Let me say this clearly. I don’t know of anybody who goes into something trying to be the best black anything. We understand that. That’s a given,” Smith said. “But I do think it’s important to acknowledge a level of pride and a feeling of a level of accomplishment for being somebody who happens to be of African American descent, who competes and achieves and accomplishes things on the highest level while also bringing attention – to some degree anyhow – to the pride that they feel being black. Because they’re allowing themselves to be a reminder to those who preceded them, who worked so hard, accomplished and achieved so much, but were denied the accolades that that individual is receiving.”

The "issue" was not that RGIII might be a black Republican with a White fiancee, RGIII doesn't want to be known as JUST the best BLACK quarterback, or the best BLACK runner.  He wants his accomplishments to be remembered separate from his race.  He wants to be known as simply "The Best Quarterback," period.  That's the "issue" and the "cause" that Parker describes.

People see the words "Black" and "Republican," and immediately think that he's trying to say that RGIII is not black enough because he may be a Conservative.  That's a load of crap.

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4.5 Million Jobs? Actually...Yes.

I was listening to Former President Bill Clinton tow the Democrat Party line last night when I heard him announce that 4.5 Million Jobs had been created since Obama took office. Immediately my brain went into fact-check overdrive.
After my foray, I actually find it funny how the Romney camp and everyone is debunking the 4.5 Million jobs created number the Democrats have put out there.  Their rebuttal is that there has actually been only a net increase of 300,000 jobs since Obama took office because of jobs lost in his first year.
However, looking at it from an economic standpoint, the number is not wrong, and the Democrats shouldn't hide it.  The real number is 4.5 Million jobs created *since the economy bottomed out in January 2010,* a year after Obama took office.
I can't rationalizing counting that first year against Obama.  He was elected in November of 2008, and sworn in in January of 2009.  But the market down-turn started in October of 2007, and escalated with the collapse in October of 2008.
*WARNING: Here comes a potentially offensive statement* To me, counting the jobs lost between January of 2009 and January of 2010 as being "Caused by Obama" is like blaming the 3,000+ deaths at the World Trade Center on G.W. Bush because he happened to be president when the Twin Towers were attacked. The economy had been falling for a full year before Obama was elected, and once it finally hit bottom the jobs did start coming back.
So in my opinion, 4.5 Million jobs were created WHILE Obama has been the President.  The true question is were those jobs created BECAUSE Obama has been the President, and could there have been more jobs created if different policies had been enacted.

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How Will You Be Remembered?

I was listening to the radio yesterday and one of the guest speakers was talking about the “Chick-fil-a Appreciation Day” and Gay marriage in general.  They made an excellent point about the issue.  Morally, you can feel however you wish about it.  If you disagree with it, then that is your personal opinion.  But when it comes to the issue of the government, it becomes a civil rights issue.  The fact of the matter is that gays DO NOT have equal rights in the United States because of the legal benefits that come with marriage (See http://www.nolo.com/legal-encyclopedia/marriage-rights-benefits-30190.html for a list of benefits).

In the history of the United States, people have used Biblical passages repeatedly to justify legislation that prevents equal rights to a particular group of citizens whether there was actually a legitimate scripture quote or not.  Back in the 1800’s slavery was justified by politicians through biblical verses, and later it was used by some to justify laws against interracial marriage. In 1958 when Virginia Judge Leon Bazile refused to hear the case of Loving v. Virginia and was quoted as saying of interracial marriage, “Almighty God created the races white, black, yellow, Malay, and red, and placed them on separate continents, and but for the interference with his arrangement there would be no cause for such marriages. The fact that he separated the races shows that he did not intend the races to mix.”  There actually is no direct verse in the Bible but the story of the Curse of Ham was often used.  There are also verses in Ezekiel, Deuteronomy, Judges, and others that have been used for the same justification.

All of those issues have been overturned.  All races in the United States legally have equal rights, and and any man can marry any woman.  However, being born homosexual is apparently grounds for inequality in the United States.  So in this time, the fact of announcing opposition of gay marriage, I feel, is to say you are for the willing oppression and denial of civil rights to a specific group of United States Citizens.  Gays will have equal rights, and I will vote for them to have those rights.  And when that does happen, how will those who opposed it be remembered?

Ask yourself, how does history remember the likes of Strom Thurmond, Robert Byrd, Howard Smith, or Former Alabama Gov. George Wallace Jr?

To Melissa Carter, you are amazing, and every person needs to hear your voice. Listen, and be informed. http://bit.ly/Qzjk2d

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