Why Presidents Matter in Tax Policy

Cactus of the econo-blog Angry Bear looks for a connection between who's President and tax enforcement rates. A few interesting results: Ronald Reagan was a strict tax enforcer in his second term, while George W. Bush's first term saw the largest decline in the tax enforcement rate in the last 50 years. Ive had a few posts in the last month or two about taxes and honesty. One post showed that the lower the degree of tax enforcement, the lower the share of total income taxes paid by the top 1% and 5% of income earners. Another noted that over time, the correlation between the amount of corporate and individual income taxes paid and enforcement has increased, which seems to indicate that a lot of us are becoming less honest when it comes to taxes. But how big is the problem of tax evasion? Is there any direct evidence that it gets better or worse in any given year? Its a tough question to answer because it requires knowing how much income people actually make, not how much they report to the IRS. Being an adorable scamp, I was wandering around the IRS website and located a table showing, among other things, taxable income (from the Statistics of Income or SOI) as a percentage of total income (from the BEA NIPA tables). The data runs from 1950 to 2004.
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