This is one reason for why I refuse to take Supply-Side economics seriously. (No one, that I know of, denies the existence of some sort of "Laffer Curve". The question is, "At what point are tax rates too high?" I submit to you that they were not too high when the recession began.)
The incentive to compete depends on the opportunity to turn a profit. I think you're portraying it a bit too much as a game to wealthy people. Production only began increasing because of the expectation that business would be able to start making money again. Bush's tax cuts simply shifted money, that was already in the system, to different sectors. The tax cuts, unfortunately, weren't designed to fight the recession. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
At various times in history tax rates have been as high as in the 90% bracket and the society did not come to a halt. Policies not Politics ---- Daily Landscape
At various times in history tax rates have been as high as in the 90% bracket and the society did not come to a halt.
That's certainly true. However, I submit to you that the evidence would suggest the economy performed better when rates were at a more reasonable level (35-40% in income taxes -- not counting payroll, which pays for Medicare and Social Security in America -- for the top bracket), which is why I brought up President Kennedy's tax cuts.
No one, in my opinion, should have to pay 90% of their income in taxes.
I think you will find that the opposite is true. No mainstream (that is, not affiliated with at rightwing think tank) economist thinks there is any such thing as a Laffer curve effect. There is also no empirical evidence to support the effect.
Paul Krugman is about as mainstream an economist as I think you'll find. (He was nominated for the Nobel this year, and, at about 50 years old, that's a very young age to be nominated.) As is Brad DeLong. Both of whom, I believe (not entirely sure on DeLong), will tell you that there is a Laffer Curve, but that no one knows where, exactly, is it.
There's a difference between society coming to a halt and the economy not maximizing its potential. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
This is all straight out of the writings of 19th-Century English market liberals. guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
There's a difference between taxing people out of need for something -- food stamps, health care, education, whatever -- and taxing them excessively because one group doesn't believe they're putting their money to proper productive use.
Better to stick with the 18th- and 20th-Century liberals. ;) Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
They stayed there until Kennedy/Johnson cut them to 70% in the 1960s. The 1981 Reagan tax bill cut them to 50%, and the 1986 tax reform cut them to (around) 33%. Clinton put them back up to 40%.
Since the economy performed better during WWII (and during the subsequent postwar boom), and during the Clinton boom years than they did in the Reagan/Bush I years, on the surface there seems to be little correlation between marginal tax rates and economic performance.
You may be right, though, in that few people probably ever actually pay tax rates in excess of 40% or 50% due to loopholes and evasion.
The economy was fairly strong during the Truman and Eisenhower eras, but nowhere near the expansion of the 1960s. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
