The five dollar question being kicked around (and already decided upon) is this: “Will raising tax rates on the rich increase revenues, as Barack Obama hopes?”
[W. Kurt] Hauser uncovered the means to answer these questions definitively. In a Wall Street Journal article in 1993, he stated that “no matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5 percent of GDP.”
This article is updated with recent data through 2007 (alternate link). Politically, of course, you can’t just let those dang rich people off that easily, but if you care about results more than political points, you have to find ways to raise the GDP.
© 2009 Scott Wiersdorf