While Americans were arguing about Reaganomics in the 1980s, Swedish households were enjoying a negativetaxrate on capital income, once generous deductions and adjustments for inflation were taken into account.
Fisher and I agree that the trade gap and the budget deficit are positives for stocks: the bigger the better. (Americans hold far too little debt, and anything that increases it is a plus.) He also celebrates the supply-side tax cuts, though he deems a negative for stocks the currently little noticed all-government budgetary surplus caused by the taxrate reductions.
Grubert and Altshuler figure the rate on investment in a low-tax country would rise to a negative 4.4 percent under the per-country version, far higher than the negative 24 percent under current law.
At the same time, consumer debt levels skyrocketed and the savings rate actually turned negative (U.S. households consumed more than their after-tax income).