July 28, 2011
WHAT CAN EVIDENCE MEAN TO AN IDEOLOGUE:
Do Low Tax Rates On Rich People Actually Ruin The Economy? (Henry Blodget, Jul. 14, 2011, Business Insider)
[A]nother one of the contentions of today's Republican party is that high income tax rates are always bad for the economy, because they deprive people of an incentive to work hard, thus making us a nation of lazy good-for-nothings.Posted by Orrin Judd at July 28, 2011 6:55 AM
This argument has been repeated so often and for so long that it is now basically regarded as fact.
But, interestingly, the history of income tax rates in the US actually suggests that it may be b.s.
Some of the most prosperous periods in US history (1950s and 1960s) have come during periods of super-high marginal income tax rates. And some of the most disastrous periods in US history (1930s, 2010s) have come after periods of super-low income tax rates.
In the good periods, moreover, the middle-class boomed and inequality between the country's highest earners and everyone else shrank. In the bad periods, meanwhile, inequality soared, and the richest 1% of the population came to earn a staggering amount of the country's income.