Monday, Jan. 2, 2006 | 7:38 a.m.
Many often claim that reducing the percentage rate of a given tax will always result in reduced revenue. This in spite of existing proof that rate reduction has always resulted in a significant revenue increase. Case in point:
Throughout the '70s and early '80s the revenue from capital gains taxes fluctuated between 9 billion and 11 billion dollars per year. In just one year, after the percentage rate was cut from 28 percent to 20 percent in the mid-1980s, capital gains revenue jumped all the way to to $47 billion!
The political outcry that this tax rate reduction only helped the wealthy, and hurt the poor, was so strong that the following year the 28 percent was reinstated, resulting in a reduction in revenue all the way down to $27 billion. A loss of 20 billion tax dollars, yet referred to as a political victory for the poor.
Bill Cramer Las Vegas
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