Marginal tax rates were cut substantially during the 1980s, and although rates were increased in the early 1990s, the marginal rates applicable in the highest income brackets were still well below the top rates of the 1960s and 1970s. How did the lower rates of the 1980s and 1990s affect the share of taxes paid by high income taxpayers? Were the lower rates of the 1980s and the 1990s good or bad for the economy?

Question

Karen Hanna

Business

9 July, 12:51

Marginal tax rates were cut substantially during the 1980s, and although rates were increased in the early 1990s, the marginal rates applicable in the highest income brackets were still well below the top rates of the 1960s and 1970s. How did the lower rates of the 1980s and 1990s affect the share of taxes paid by high income taxpayers? Were the lower rates of the 1980s and the 1990s good or bad for the economy?

+5

Answers (1)

Know the Answer?

Baldwin · Answer 1

The lower tax rate of 1980s and 1990s have expanded the portion of expenses paid by the high-salary citizens.

For instance, when top negligible expense rates were decreased during the 1980s from 70% in 1980 to 50% in 1982 to 30% in 1986, portion of all out assessments paid by the best 50% of the U. S. workers have expanded by in excess of 20%.

Comparable circumstance has been knowledgeable about the 1990s too when in 1997 capital additions tax was decreased; a considerable increment in income got from capital increase tax from top-workers was seen.

Lower rate of the 1980s and 1990s were useful for the economy. In both these periods, U. S. economy has enlisted solid developments and financial extensions are very enormous.

One reason for such a noteworthy exhibition of the U. S. economy was said to be the lower tax rates winning during these periods.

It has been expressed that these lower tax rates have expanded the motivation to work, contribute, and supply assets for the top workers in United States and have brought about solid execution of the U. S. economy.