Thomas Sowell on Tax Cuts

Dissecting The Demagoguery About ‘Tax Cuts For The Rich’
by Thomas Sowell

High rates drive taxpayers into shelters.

Mellon pointed out that, under the high income-tax rates at the end of the Woodrow Wilson administration in 1921, vast sums of money had been put into tax shelters such as tax-exempt municipal bonds instead of being invested in the private economy, where this money would create more output, incomes and jobs — thereby producing higher tax revenues for the federal government.

It was an argument that would be made at various times over the years by others — and repeatedly evaded by attacks on a “trickle-down theory” found only in the rhetoric of opponents.

Sowell remains a reliable spokesperson for the conservative movement.

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One thought on “Thomas Sowell on Tax Cuts

  1. I do believe that is precisely what Obama is thinking…I think he wants to drive business to “invest” in the shaky US Treasury/Municpal bond market and in the dollar, rather than in growing internally. I think he is being told that the way to stave off defaulting on our debt is to get people to buy T-bonds. Might produce revenue in the short term, but it will continue to collapse the underpinnings of the economy.

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