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Reagan, Taxes

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					Today’s Lecture:

Taxing and Spending

Number:

22

Lecture Organization: • Class Announcements • Ronald Reagan and the New Conservatism • Reaganomics • Taxation and Wealth

Class Announcements

website -- problem with uploading audio -- sent around links to prior-year’s “movie lectures” -- audio clips for your class should be up today

Class Announcements

Exam -- can retake any portion with slight grade penalty -- the higher of (a) average of the two (b) one step grade penalty

Class Announcements

Final Exam -- is during finals week (week of March 16th) (consult university schedule) -- voluntary essay question already mailed -- study guides will be mailed tomorrow

Class Announcements

Bonus Points -- get an estimate on Wednesday

Questions?
Time

Taxation and Wealth

top marginal rate -- cut the top rate to 50% in 1981 (phased in, 3 years) -- then cut it to 28% in 1986, but also cut out the loopholes -- during the 1990s, Clinton raised the top rate to 39.6% by the end of the decade. -- Bush trimmed it to 36% ???

How Rich People Make Money

Income

Assets

-- 1 million dollars -- taxed at top rate (after deductions) _______________ $650,000 (assumes 35%)

-- 10 million at 5% growth

Answer: Question:
Take a guess: how much $500,000 is that? -- taxed at 15% (capital gains) -- $75,000 in tax ----------------------------

$425,000

Taxation and Wealth
deficits cyclical versus structural -- prior to Reagan, deficits were cyclical. After Reagan, they are structural.

-- David Stockman: this is due to “Rosy Scenario” and the failure to achieve the growth targets.

Tax Cuts

Taxation as a percentage of GNP (1995)

50%

Sweeden = 50%

Denmark = 49%
Finland, Netherlands, Norway = 47%
Question: Question: What percent of GNP Are government lower? does we higher or control in America?

Taxation as a percentage of GNP (1995)

45%

Belgium = 45%

France, Austria = 44%

Taxation as a percentage of GNP (1995)

40%

Italy = 42%

Greece = 41%
Germany = 40%

Taxation as a percentage of GNP (1995)

35%

Canada = 37%

New Zealand = 36%
Spain = 36% “England” = 35% Switzerland = 32%

Taxation as a percentage of GNP (1995)

29%

America = 29%

Japan = 29%

Taxation as a percentage of GNP (1995)

0- 17%

20 - 30%

30 - 40%

40 - 60%

100%

Libertarian

Liberal

communism

Conservative

“Socialism”

American Political Conservatism = 25 – 29 %

American Political Liberalism = 30 – 35 %

President Obama

interesting time -- what does this election represent and what will happen in the future two paths

-- Jimmy Carter or “Ronald Reagan for the Democrats”


				
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posted:3/12/2009
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