WESTERN ROOFING EXPO 2013 JUNE 9-12 • PEPPERMILL RESORT & CASINO • RENO 50/50 GOLD DRAWING 800.725.0333
ECONOMY Why Lower Tax Rates Are Good for Everyone Convention Spotlight WESTERN ROOFING EXPO 2013 by Stephen Moore Guest Speaker - Stephen Moore Stephen Moore is a successful speaker and writer who shares his views and insights with his audiences. Moore joined The Wall Street Journal as a member of the editorial board and senior economics writer on May 31, 2005. He currently divides time between Washington and New York focusing on economic issues, including budget, tax and monetary policy. Moore has been a frequent contributor to the Wall Street Journal over the years, and is previously known as the founder and former president of the Club for Growth, which raises money for political candidates who favor freemarket economic policies. He left that position in 2004. Prior to joining the Wall Street Journal, he was president of a new organization, the Free Enterprise Fund. For many years, Moore has served as a senior economist on the Congressional Joint Economic Committee, as a budget expert for the Heritage Foundation and as a senior economics fellow at the Cato Institute. Through his Cato Institute affiliation, he has published dozens of studies on federal / state tax and budget policy. Moore was also a consultant to the National Economic Commission in 1987, and research director for President Reagan’s Commission on Privatization. Moore is the author of five books, including “The End of Prosperity: How Higher Taxes Will Doom the Economy – If We Let it Happen.” His books also include “Its Getting Better All the Time: The 100 Greatest Trends of the Last Century,” and “Bullish on Bush: How the Ownership Society Will Make America Stronger.” Stephen Moore is a frequent guest on talk radio and multiple television networks to discuss economic policy and related impact. He graduated from the University of Illinois and holds a masters degree in economics from George Mason University. If we want millionaires to pay more taxes, then we need an economy where there are more millionaires. Courtesy of: The Wall Street Journal President Obama recently announced that any budget deal must include $1.6 trillion from higher taxes. "When it comes to the top 2%," he said, "what I'm not going to do is to extend further a tax cut for folks who don't need it." He argued that we are never going to get anywhere near balancing the budget without more revenue from people earning above $250,000 a year. He's probably right about that, though not in the way he intends. The country needs an economy that will create more of the "millionaires and billionaires" that Mr. Obama loves to excoriate, not more taxes from those who already exist. Total taxes paid by millionaires fell by almost $100 billion between 2007 and 2010, the last year with statistics available from the Internal Revenue Service. The drop resulted not from too-low tax rates, but from the severe recession and an anemic recovery since 2009 that thinned the ranks of the wealthy. If Mr. Obama wants the Warren Buffetts and Justin Biebers to shoulder more of the nation's tax burden, he would do well to pay attention to the history of tax rates. Over the past century, lower rates have shifted the tax burden onto high-income earners and away from the middle class while maintaining the tax code's progressivity. Let's start with the 1920s. All tax rates were cut during the Calvin Coolidge administration, including the top rate, which fell to 25% from the World War I high of 73%. Between 1923 and 1928, benefited by lower tax rates, the economy surged, raising incomes and living standards for the middle class. Tax collections in real terms nearly doubled—and the share of taxes paid by those who made more than $100,000 a year (more than $1 million today) increased to 51% from 28%. The top tax rate rose to 63% in 1932, to 79% in 1936, and to 90% during World War II. The higher rates persisted after the war, and while the economy grew as the government's economic role ebbed, high rates generally helped to hold back the pace of growth. Tax rates weren't reduced much until the Kennedy administration. JFK cut rates by about 30% for every income group. He argued that the lower tax rates would "boost the economy, produce revenues, and achieve a future budget surplus." He even called lower rates "an investment in the future." The Kennedy tax cut was enacted in 1964 (after JFK's assassination), lowering the highest tax rate to 70% from 91%. His prediction that the economy would surge was validated by rapid growth every year from 1965 through 1968. Tax collections grew by 8.6% per year and unemployment fell to 3.4%. "The unusual budget spectacle of sharply rising revenues following the biggest tax cut in history," announced a 1966 U.S. News and World Report article, "is beginning to astonish See ECONOMY (p.11)
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