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Politics : Formerly About Advanced Micro Devices
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To: bentway who wrote (851104)4/27/2015 8:43:20 PM
From: TimF  Read Replies (1) of 1577020
 
So what happens if that top marginal tax rate goes up from its current 35 percent to, for example, the 1980 rate of 70 percent?

For the more than 120 million American workers who don’t earn more than $372,950 annually, it won’t mean a thing.

Actually it would mean quite a lot. A big increase like that would be both a large "anti-stimulus" and would have serious longer term negative supply side effects.

Back before the rate was cut, it was more of a nominal than a real rate because so much income was sheltered (both because there where more and easier shelters available, and because there was so much more incentive to use them), but even with a restoration of the shelters, you would have a lot of disruption as investment was redirected, and a long term loss in economic efficiency as more money chased shelters.
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