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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