Control Panel: Stock market rally widening

Investment Analysis Clubs Macro Economic Trends and Risks
61

If a 50% tax rate is good, 100% must be perfect. The ultimate sublime rate would be 200%.

The Captain

62

We have 21% corporate tax rate. We grow our GDP much faster at 50%.

We are not discussing income taxes.

Low corporate tax rates slow economic growth.

1 Like
63

I donā€™t have a clue what you are discussing but reality it is not.

Outcome taxes?

The Captain

64

Maybe see what the fastest rate of GDP in the United States was and what the tax rate was at that time. It shouldnā€™t be to hard to figure out.

4 Likes
65

The Laffer curve? Most people donā€™t mind a small tax but as rates grow so does evasion. In the socialist system, where nothing is yours, the results tend to be dismal.

The Captain

66

Recent history 1950s, 60s, and 70s,

From 1950 to 1980, the United States federal corporate income tax rate fluctuated. Hereā€™s a breakdown based on the provided search results:

Key trends:

  • 1950s: The corporate tax rate was relatively high, starting at 42.0% in 1950 and reaching 52.0% by 1952, remaining at this level through most of the decade.
  • 1960s: The rate stayed around 52% to 53% through most of this decade.
  • 1970s: The rate saw a gradual decline, falling in steps towards 35%. For example, it was 52.8% in 1969, 49.2% in 1970, and stayed at 48.0% from 1971 to 1978. In 1979 and 1980, the statutory rate was 46.0%.
  • Effective vs. Statutory Rates: Itā€™s important to note the difference between statutory and effective tax rates. The statutory rate is the official rate set by law, while the effective rate is the actual percentage of profits paid in taxes after deductions and loopholes. While the statutory rate was quite high in the 1950s, the effective rate may have been lower due to various deductions and exemptions. Some data suggests effective rates in the 1950s were around 42-45% for top earners.

image
image1000Ɨ743 65.9 KB

From 1949 to 1980 there were 12 out of 31 years with over 5% real growth rates, plus 5 years that are almost 5% growth.

From 1981 to 2020 there is 1 year with over 5% real GDP growth.

Based on the search results, hereā€™s a summary of the U.S. federal corporate tax rates between 1981 and 2020:

  • 1981: The top corporate tax rate was 46%.
  • 1982-1986: The top corporate tax rate remained at 46%. The Tax Reform Act of 1986 later reduced it, but this change came into effect after the specified date.
  • 1987: The Tax Reform Act of 1986 brought changes. The top marginal rate dropped to 34% for taxable income over a certain threshold, though it involved a blend of old and new rates for straddling tax years.
  • 1988-1992: The top corporate tax rate was 34%.
  • 1993-2017: The top corporate tax rate was increased to 35%.
  • 2018-2020: The Tax Cuts and Jobs Act of 2017 enacted a flat corporate tax rate of 21%. This replaced the previous graduated structure.

In summary: The period between 1981 and 2020 saw significant fluctuations in the U.S. corporate tax rate, notably a drop from 46% to 34% due to the 1986 Tax Reform Act, and a further decrease to a flat 21% under the 2017 Tax Cuts and Jobs Act.

3 Likes
67

@captainccs

Can you document any history in the US where lower taxes helped the real GDP growth rate?

68

What if I canā€™t, does that change reality? One of the few things I learned in college is to look up things I needed to know. Now it has become even easier with the internet, Google, and AI. Ask them!

The Captain

PS: I know it was trick question :imp:

1 Like
69

Just because someone asks you to prove your point does not make it a trick question. But if you canā€™t back up your point than maybe your point is invalid. Reading a book on someoneā€™s opinion is not proof of anything, especially when over time that same person does not follow their own beliefs. That would be proof that their opinion really did not work in Reality.

70

Absolutely correct. it was my fine sense of logic that came to the conclusion.

The Captain

2 Likes
71

Seriously Captain,

Economics has a relations and inverse relations set of curves and realities. Sometimes something is so plain in the accounting room. Higher corporate taxes in the 50% region spur excellent growth in the US economy.

Not doing this in DC is stupid. There is no other conclusion for the average guy just trying to see something good come about for this economy.