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1/1/8: The Laffer Quix: The Effect of Two Changes in Income Tax Rates


Discussion:  The two charts show the effect of the largest income tax cut and the largest income tax increase in US History.

In 1982, the Reagan tax cut took effect (it began three months into the fiscal year), reducing the top marginal rate
from 70% to 50%. 

In 1993, the Clinton tax increase raised the top rate from 31% to 39.6%.

The Laffer quiz:

Which of these charts is Clinton's and which is Reagan's?

Choose your answer:

                   1.  Reagan - A; Clinton - B
                   2.  Reagan - B; Clinton - A

 

Sources: 

previous weeks:  Poverty: Children and Elderly Iraq Causalities  Budget deficits Voter Turnout  Job Approval

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