Above is a chart comparing the highest individual income tax with the annual unemployment rate and change in annual real gross domestic product from 1940-2008.* In the post-War era, the Eisenhower administration featured the highest individual tax rate (91%) while the George H.W. Bush and George W. Bush administrations hosted the lowest and second lowest highest individual income tax rate regimes. While during the Eisenhower administration the unemployment rate averaged 4.875%, during the George H.W. Bush administration it averaged 6.14% and during the George W. Bush administration it averaged 5.265%.
It is of course a truism that the economy is more complicated than to lend itself to full description with just GDP, highest income tax rate, and unemployment. The above describes only that merely lowering the highest individual tax rate does not yield greater employment levels. And, in reviewing the chart, it appears that lowering the highest individual income tax rate does not generate GDP growth. A more complete analysis should include a discussion of the amount of tax payers that actually pay that highest individual tax rate.
Turning now to an actual welfare program, when asked about cutting social welfare I immediately thought of WIC. So, what would happen were WIC eliminated? In 2007, WIC cost the federal government $5.4 billion. Also in 2007, 1.1 million tax returns were filed at the highest individual rate (35%). Now, distributing the cost of WIC over the income tax brackets at the same proportion it was taxed, and dividing those values by the number of returns filed in that bracket tells us that by eliminating WIC, each of the 1.1 million filers in the highest tax bracket would have saved $577.49, or 2/10 of a percent of the lowest earner captured by the 35% bracket. On the other hand, WIC service 8.3 million pregnant women and infant mothers.