Tax Rates – A Question About the Right
Those who lean left on economic issues generally feel that tax rates are too low. Those who lean right on economic issues generally feel that tax rates are too high.
A common retort to the left position – one that has appeared in comments to various posts on this blog, in fact – is: Why don’t you raise tax rates to 100% if taxes are so good? But most on the left don’t feel that tax rates of 100% are optimal. If pressed to come up with a figure, most of us would say the optimal tax rates for growth and tax collection (and of course, the optimal tax rate for growth and the optimal tax rate for tax collection can be a bit different) is somewhere in the neighborhood of what rates were during the Clinton era, or perhaps between that and what they were when Reagan took office. In fact, I’ve had a few posts arguing those points.
A common retort to the right position – one that has appeared in comments to various other comments to posts on this blog, in fact – is: Why don’t you cut tax rates to 0% if tax cuts are so good? Now, presumably, with the exception of some deluded folks, nobody on the right feels that tax rates of 0% is the way to go. But then what is the “optimal tax rate” according to the tax cutters? Are we, at long last, at that point? Are optimal tax rates lower still? In the teens? In the single digits? If pressed, if they had to put a figure on it, what is the rate (or range around which) they feel the optimum sits?