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Politics : A US National Health Care System? -- Ignore unavailable to you. Want to Upgrade?

To: John Koligman who wrote (5059)	2/29/2008 12:13:57 PM
From: TimF	Respond to of 42652

OT I believe they where 70% for a large part of that period. And yes the economy did pretty well, but that doesn't mean the high rates didn't hurt the economy. In fact they likely didn't even raise more revenue. Increasing tax rates from here probably would raise more revenue (at least at any time scale but the long term, and tax rates seldom remain stable for the long term), but 70% would appear to be on the other side of the Laffer curve. People, even very wealthy people, didn't generally actually pay 70%. There where a lot of loopholes and tax rates that high gave a lot of incentives to use the loopholes (including those that might be expensive to use, and that wouldn't get used if tax rates where lower). But that only means that the effect of extraction from the private sector is somewhat lower, while the effects of compliance costs and perverse incentives (or in other words the dead weight loss from taxation) where larger.