http://research.stlouisfed.org/fred2/series/FYFRGDA188S
Notice that after World War II, Federal tax receipts as a percentage of GDP have fluctuated in a 5% range between about 14% and 19%.
This is a little surprising, given that over that time, the lowest tax bracket has varied from 23% to 10%, and the highest tax bracket has varied from 91% to 28% —
http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_top_rates
Here's a chart showing the lowest and highest marginal tax rates from 1913 to 2011 --
http://taxfoundation.org/article/us-fed-individual-income-tax-rates-1913-2013-nominal-and-inflation-adjusted-brackets
That tax revenues as a percentage of GDP have averaged under 19%, despite large changes in the top marginal income tax rate, has been dubbed 'Hauser's Law'.
Many have made note of this, and the problem it poses for those who claim that government can simply raise taxes on the rich to solve its debt problem —
http://reason.com/blog/2010/11/29/the-remarkably-stable-amount-o
http://taxprof.typepad.com/taxprof_blog/2010/11/wsj-hausers-law.html
And many others aren't aware of this issue.
For example, see Mark Cuban, owner of The Dallas Mavericks, in a segment from an August 2012 episode of 'Real Time with Bill Maher', respond to this question from Maher —
If the government raised your taxes, Mr. Cuban, would you still be a billionaire, still create jobs, and still invest in this country?To which Mark Cuban replied —
Absolutely. They can take my taxes from 35 to 39 percent and I wouldn't even notice it.As expected, the studio audience loved Cuban's answer, and responded with loud applause. Other members of Maher's panel then pointed out how much higher tax rates have been in the past, and that the notion that wealthy individuals should be taxed less is 'crazy talk'. Mark Cuban then added —
I mean, look, here's the reality. If you have enough money in the bank — if you have money in the bank, then your marginal tax rate doesn't matter. Either you're investing, or you're not. You're not making decisions — I've looked at thousands of business plans — on sharktank we see twenty a day — not one single time have I ever had a discussion about taxes in making those decisions. Not once. They don't matter — either it's a good investment or it's not.
This sounds good, especially coming from a wealthy individual like Mark Cuban, who actually owns and starts businesses. The problem is, the historical record doesn't agree with Cuban's statements.
Clearly, many wealthy individuals care a great deal about tax rates, and they'll do whatever they can to avoid paying any taxes — that Federal tax receipts were lower as a percentage of GDP when the top tax rate was over 90% in the 1950's, than they were when the top tax rate was at 40% in the late 1990's, is eloquent testimony to that fact. It's a pity that no one on Maher's panel (or in the studio audience), seemed to have any understanding that there is no historical evidence to indicate that what they were suggesting would actually work. If the majority of people agree with Maher's panel in that segment, and really believe that we will all be better off, if we can only get more of what private citizens produce into the hands of government bureaucrats, they need to rethink their views on taxes.
It's especially ironic that Mark Cuban would make these comments, given that when this aired in 2012, he was being prosecuted by the SEC for insider trading charges, for which he was later acquitted —
http://reason.com/blog/2013/10/29/mark-cuban-posts-sec-e-mail-attorney-fel
Here's a blog post by Mark Cuban, where he mocks Linda Thomsen, the woman who was Head of Enforcement at the SEC when he was being prosecuted. It seems Linda and other SEC employees involved with Cuban's case, were exchanging silly, irrelevant photos of Cuban as if they were important to his prosecution —
http://blogmaverick.com/2013/10/25/when-the-sec-does-its-homework-it-really-does-its-homework/
Here's Mark Cuban in a CNBC interview after he was acquitted of the SEC charges, denouncing the SEC employees involved with his case, and stating that he was glad this happened to him, since he could afford to fight back — I'd say Cuban certainly deserves praise for not laying down to a corrupt prosecution —
http://www.cnbc.com/id/101137664
So Mark Cuban has direct personal experience with government corruption, and after all that, he still seems to think it's a good idea if the government can collect more tax revenue. Cuban's acquittal happened just over a year after his appearance on Maher's show in August 2012, so perhaps the last year of his five year prosecution changed his mind about the usefulness of the government raising taxes — who knows.
In the end, as is often the case, this segment from Maher's show was largely a display of ignorance.
This is what is so frustrating about popular media in general, and panel discussions like this in particular. Even on a show like Maher's, where anything can be said about any topic (since it's on HBO), you typically still only hear slavish conformity from all the participants.
It's comical to see Maher with a stack of note cards, as if he, or members of his staff, have carefully researched the topic to be discussed, and so he's prepared to bring some kind of balance to the discussion.
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