Lowering taxes hurts the economy. That’s a slogan.
If facts matter, let’s look at the measurements, the metrics, the data, ladies and gentlemen.
Higher top tax rates don’t reduce economic growth.
Depending on how you look at it (i.e., growth over several years, growth over one year, going back to 1929, focusing only on the period since Reagan took office, etc)… higher top marginal income tax rates have not caused slower real economic growth in this country.
Not the message you’ll get from most economists, but the data says what the data says, and where economists disagree with the data, its a sign that something is seriously wrong with the profession, not the data.
1. Top marginal tax rates are simply not high enough to induce people who pay it to reduce their efforts.
2. Dissuading people from putting in certain efforts doesn’t prevent others from putting in the same efforts.
3. Rising top marginal tax rates may dissuade some people from working, but generally won’t dissuade those doing productive work.
4. A substantial percentage of people who are motivated enough by money that they might reduce their output in the face of even small changes to the top marginal rates are engaged in activities that are not good for society. Loss of their services is to be encouraged, not decried.
5. At the margin… paying as little in taxes as possible… The result, in many cases, is paying vast sums to accountants and keeping the money parked or hidden rather than in productive use.
There is a bit of a self-selection bias at play; people who care enough about money to become homo universitus of chicagus are also the kind of people willing to generate massive negative externalities with nary a thought to the victims (except perhaps to call them ‘losers’).