Tax the Rich. It Won't Hurt (Them, or the Economy)
Marginal tax rates have nothing to do with GDP
By Kevin Spak, Newser User
Posted Feb 24, 2010 10:51 AM CST
Demonstators hold anti-tax signs along the Ferry St. Bridge in Eugene, Ore., Jan. 26, 2010, urging voters to reject ballot initiatives on taxing the wealthy and businesses.   (AP Photo/The Register-Guard, Chris Pietsch)

(Newser) – Why doesn’t anyone argue for increased taxes on the rich anymore? Only a generation ago, American politicians had no problem calling for high marginal tax rates, but no one’s had the nerve to do it since Ronald Reagan argued that they penalized the rich for working hard—which in turn, conservatives said, reduced productivity. So Eliot Spitzer decided to crunch the numbers and see if high marginal tax rates led to lower GDP. Surprise! They don’t.

In fact, if you look at the figures—you can see Spitzer’s chart here—you’ll see that America’s biggest GDP growth spurts coincide with its highest marginal tax rates. That doesn’t prove causation of course, but it certainly proves that there’s no correlation between higher taxes on the rich and slower economic activity. “The wealthier can afford to pay more,” Spitzer concludes, “with no harm to the nation's economic growth.”

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yummines
Feb 25, 2010 7:44 AM CST
hey, the rich get richer and the poor get poorer. might as well capitalize on that with taxing the rich more and more. about 99% of their income is disposable after all, and most tend to do "conspicuous consumption" anyway, so it doesn't hurt them very much. or at all for that matter. Bill Gates has so much money, he spends money looking for ways to give it away. its ridiculous, tax them, cause in truth they don't need to care because they have more than enough anyway.
ahumbleopinion
Feb 25, 2010 2:35 AM CST
The rich got that way by taking $ from the working/middle class. Outrageous bank fees and interest rates, mortgage scams, runaway insurance premiums and health care costs, bogus investment products, outsourced jobs and layoffs. Why shouldn't they be taxed to provide for the common good? If your income is 1 million and you pay 30% tax, you still have $700,000 to live on while average Americans try to get by on less than 10% of that.
Lioness
Feb 25, 2010 1:46 AM CST
I've been saying this for years... too bad my house isn't a national megaphone. It is completely common sense to me to tax the rich more, or create a VAT like they have in Europe, but maybe that just means I don't know enough about economics... either way, thanks Eliot...