Tax Rates

Since it is tax season, it is instructive to look at historical tax rates in the US. DarwinCatholic made a quick and dirty inflation-adjustment to the base tax tables from 1955 and compares them to 2010. There is clearly a lot more to be said on this subject, the details probably matter. However, when it comes down to it, the nominal tax rate is far less now than it was 55 years ago.

This reminds me of something that John Reilly is often saying. There really is no more room to cut the tax rates in the US. The working classes pay very little, if any federal income tax. That was already done in the Reagan administration. Really what we need to to tax more and spend the same. Moderate levels of taxation do seem to work pretty well. Tino at Super-Economy looks at the relative state of the Swedish economy over the last sixty years versus the overall tax burden, and there does seem to be a sweet spot in the middle for the best economic performance.