>While the marginal tax rate on the top bracket was very high, it applied to almost nobody, and the effective taxation yield rate of revenue to GDP was actually

>While the marginal tax rate on the top bracket was very high, it applied to almost nobody, and the effective taxation yield rate of revenue to GDP was actually lower than it is today. First, it doesn't matter if it's one person, as it was in 1935, or 1000. The idea that a handful of people get to be hoarders makes the system untrustworthy. Second, very high marginal tax rates incentivize spending money on deductible expenses rather than ones that aren't deductible. When it's a use it or lose it tax rate, and you don't think the government has the best ideas how to spend it, you can avoid the tax by taking your own risks with your own money. But the point is, again, you can't be a hoarder.