Note the similarity to my capital gains study I posted in November: http://market-mousetrap.blogspot.com/2012/11/11172012-how-to-really-soak-rich.html
Romer's study showed a maximum revenue point at 33% (for Federal, State, and Local taxes combined), while my own study of capital gains rates showed a maximum revenue point at 35%.
However, the ideal goal should not be maximum government wealth, but rather maximum aggregate wealth between the public and private sectors -- which would be at 15%.
In any case, Romer is an Obama appointee, and not some Tea Party Supply Sider. If an Obama appointee can see this, why can't Congress help the President himself see it?
Well, actually, he does see it, but he doesn't care:
Note carefully that Obama did not contradict the fact that raising capital gains would bring LESS revenue. His goal has nothing to do with revenue, but rather, "fairness."
"Fairness," here, is simply in reducing the wealth of people trying to retire.
That's you and me.
Congress was forced to cave on tax rates and the government will therefore bring in LESS money.
This will prolong our fiscal crisis.
Add that to the President's opposition to natural energy sources and we will see the secular bear market continue until 2020, instead of ending in 2013 (as it would have under a Romney energy policy).
That's water under the bridge, but fair warning for those trying to invest and retire. It is vital for us to be more strategic in our investments and frugal in our habits.
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