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Politics : Formerly About Advanced Micro Devices
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To: J_F_Shepard who wrote (623627)8/9/2011 12:30:09 PM
From: TimF2 Recommendations  Read Replies (1) of 1577029
 
Changes happen at the margin as incentives change. You don't get super hard work and a lot of investment up to 100 tax rates and then get none once you reach 100%, you get a gradual decline as tax rates increase. There may be particular tipping points where the change is less gradual, some have suggested 50% is one, but whatever the exact shape of the curve the higher taxes are generally the less incentive the people paying the high taxes have to work or invest, and the less they do work and invest. Its complicated by the fact that there is also the effect where people might work or invest more to maintain their income taxes take some of it away, but that's only enough to slow the overall effect that higher taxes discourage work and investment.

And concern for higher tax rates (and also more regulation and continuing climb in spending causing fiscal instability) also reduces investment and hiring.
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