re: #281 elbruce

Except for how it never has.

Not never, just rarely.

When the JFK administration lowered the maximum marginal rate from 92% to 70%, high-income sporadic workers (prize fighters, movie stars, touring musicians) found it worthwhile to work a lot more, and high-income-always people (Fords and Rockefellers and Carnegies and other owners of large companies) stopped putting their money into tax-free foundations (which also means they weren’t building as many museums and hospital wings and endowing chairs at universities, but that’s a whole ‘nother story).

The high-income people now had 3x as much take-home pay, and they spent it on American-made goods that meant American jobs (Europe and Asia were still barely recovering from WWII, so they weren’t making a lot of exports).

GDP and tax revenue both went up; that’s why LBJ thought we could afford escalating Vietnam and doing the Great Society both.

(Reagan’s tax cuts did goose the economy so GDP went up, but not enough to generate sufficient revenue at the lower rate — that’s where his deficits came from. Most economists think that kind of goose should be temporary, then raise the rates again once the economy’s humming to get the deficit under control. But by then people were used to not paying what they’d until recently been paying, and they were very resistant to putting it even halfway back. Bush I tried and lost his job over it; Clinton did it and balanced the budget, but at the cost of eternal hatred from half the country.)