By Terry I Sarigumba

Claims have been made that raising taxes will cost jobs or cutting taxes will create jobs. During the Republican primary campaigns in 1980, Ronald Reagan used these lines as the mainstay of his platform but his primary opponent, George H. W, Bush, called the platform “voodoo economics.” George H. W. appears to be correct. For instance, as illustrated in Figure 1, during the Truman and Eisenhower years (1945-1961), the top tax rates hit almost 92%. It’s difficult to understand why the wealthy Americans during those times tolerated this ridiculous wealth take away by the government. Give away 92% of the results of your effort to the government? But, during these high tax years, unemployment almost did not exist. And during these periods, following the economic boom after World War II, USA achieved so much economic prosperity and became the richest and militarily mightiest nation in history. There was no wide income disparity while the middle class prospered and enjoyed reaching their American dreams [...]

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