Taxes Have Consequences: An Income Tax History of the United States
By Dr. Arthur B. Laffer, Dr. Brian Domitrovic, and Jeanne Sinquefield
Post Hill Press, September 2022
Taxes Have Consequences is the definitive history of the income tax and its effect on the economy. The top rate of that tax has determined the fate of the American economy, tax revenue from the rich, and the degree of poverty in the lower income cohorts. When the top rate has been high, as in the late 1910s, the 1930s, 1940s, 1950s, and 1970s, tax revenues from the rich suffered, with corresponding negative effects on the well-being of the lowest earners. The most brutal example was the Great Depression and its aftermath World War II. Based on the data, outrageous tax increases caused the Great Depression which then led to World War II. In contrast, when the top tax rate was cut and held at reduced levels—as in the 1920s, the 1960s, the 1980s and 1990s, and briefly in the late 2010s—astonishing reversals occurred. The rich brought their money out of hiding and put it to work. The swings in the American economy have had an inverse relationship to top income tax rates.
Taxes Have Consequences explores the Siamese twin of the income tax: tax shelters. When tax rates go up, the rich earn less while sheltering more of what they earn. No wonder income inequality appears to improve: the rich report much less while lower earners simply earn less. The effect on lower earners—from higher taxes on the rich—is devastating in every case.
Little known fact: local property taxes and new state taxes were crucial in causing the Great Depression. Taxes Have Consequences provides an exacting analysis of the Trump tax cut—its profound effect in boosting average income and the livelihoods of lower earners. World War II, the culture of tax avoidance, the Roaring 1920s, JFK, Reagan, the sluggish 2000s—all these topics are explained.
This book is on-topic, easy to read, and logically based on fact not fiction.
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- Frontispiece/dusk jacket
- Chapter 1: Whatever
- Chapter 2: Income Tax Avoidance–The Income of the Right is Not What it Seems
- Chapter 3: Beyond Piketty–The Laffer Curve is Alive and Well
- Chapter 4: Tax Cuts of the Roaring 1920s
- Chapter 5: The Smoot-Hawley Tariff, the Revenue Act of 1932, and Crush of the Great Depression
- Chapter 6: Tax Rates and the Persistence of the Great Depression
- Chapter 7: Unindicted Co-Conspirators: States and Localities During the Great Depression
- Chapter 8: World War II and the Economy
- Chapter 9: Government Retreat and the Emergence of Post-World War II Prosperity
- Chapter 10: High Tax Rates and the Sluggish 1950s
- Chapter 11: The Growth Takeoff of the 1960s
- Chapter 12: The States After World War II
- Chapter 13: Taxes and Stagflation
- Chapter 14: The Great Boom, 1982-2000
- Chapter 15: Sluggishness in the 2000s
- Chapter 16: The Trump Tax Cut and Economic Resurgence into 2020