tag:blogger.com,1999:blog-6276561747841568697.post714479765158211580..comments2024-03-27T05:23:48.855-04:00Comments on Krugman-in-Wonderland: Krugman Once Again Contradicts HimselfWilliam L. Andersonhttp://www.blogger.com/profile/01802990642236807359noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-6276561747841568697.post-15603264515796391572010-05-26T06:30:05.879-04:002010-05-26T06:30:05.879-04:00This isn't necessarily related to the blog pos...This isn't necessarily related to the blog post to which you refer, but I was recently shocked speechless by Krugman's apparent attempt to illustrate a positive correlation between the top marginal tax rate and economic growth.<br /><br />I confess that I don't know that much about the history of US income taxation, but even a cursory glance at the data supplied by the National Taxpayer's Union reveals that the top rate of marginal taxation has moved around a lot. I mean, Reagan may have cut the top marginal tax rate to 50% from 70%, but he also put the rate at which this takes effect down to 100K-150K range (from ~200K). It's uncontroversial to suggest many more people would then be paying the top tax rate, since government was in effect using a bigger net. Likewise, it would also appear to me that, during this pre-Reaganesque "Golden Age", despite the absurdly high tax rates, it would only be very few people who actually had to pay them. Comparing a tax rate of 70% on income over $200,000 in the 60s with 35-40% on income over 250K-300K in the 2000s, after the constant debasement of the currency, is utterly meaningless at the best of times. <br /><br />No doubt if he had factored in the constant erosion of the dollar's purchasing power, or put government spending as a percentage of GDP next to the economic growth rate, we'd be seeing some different results.<br /><br />Anyway, a little off-topic I guess, but I thought it was useful to point out. I didn't see anyone make a comment to this effect on the actual blog post - perhaps the "moderators" at the NYT have been working overtime?Unknownhttps://www.blogger.com/profile/00289445360820713067noreply@blogger.com