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Let's try this then: Assertion: "high" (greater than 50%?) marginal tax rates make economic growth impossible. Evidence: Top tax rates between 1940 and 1980

Let's try this then: Assertion: "high" (greater than 50%?) marginal tax rates make economic growth impossible. Evidence: Top tax rates between 1940 and 1980 were between 70 and 90%. Growth was higher than it was after 1980. Conclusion: the assertion about the harmful effects of a high top/marginal tax rate is false. (I think this process is called "induction"). Note that this does not prove that high tax rates are beneficial, only that they are not harmful. It's certainly possible that the general slowdown since 1980 is due to other factors, such as growing scarcity of cheap energy and other materials. But investigating alternatives will screw with the livelihood of somebody in the top 0.01% income earners, so one might argue it's harmful to your health to push too hard for such :-)

Roboprog 14y ago
Note that I am NOT arguing for a linear relationship in any way, shape or form. Clearly, a tax rate that approaches 100% prevents any activity from taking place in the open. Also, one could argue that a property tax would be better than an income tax as a way to enforce maintenance of the commons and to provide infrastructure and an educated work-force. (I tend to favor use of taxes as "investment", rather than "money for nothing")
- nirvana 14y ago
  You're knocking down a strawman. The position is that higher tax rates reduce economic growth. Your evidence does not contradict that assertion. Doesn't even touch it. Further, you're dealing with claims and a study that are ideologically driven... so more precision is required, not less.
tolmasky 14y ago
You began with the question of whether higher marginal tax rates made economic growth "impossible". After finding that there was growth between 1940 and 1980, you should have concluded "no, it does not make it impossible as we have a counter example". This follows and is called induction. But you for some reason chose to then alter the premise and say you proved that high marginal tax rates are not harmful. You have in no way proved this. For all you know without those high marginal tax rates, growth would have been even HIGHER between 1940 and 1980. I am sure you do not believe this to be the case, and that is a very reasonable belief, but understand that it is not proven by this evidence (nor is it disproven mind you). True evidence-based proofs, the way its done with science, requires that you test one variable. In the example above you'd have to have a parallel economy where all else was the same except the tax rate. Unfortunately this is impossible, but this does not mean we get to change what "proof" means. Economics would work much better if everyone came to terms with the fact that it is untestable and was honest with themselves that all opinions regarding it are just beliefs, regardless which side you fall on.

Roboprog 14y ago

Note that I am NOT arguing for a linear relationship in any way, shape or form. Clearly, a tax rate that approaches 100% prevents any activity from taking place in the open. Also, one could argue that a property tax would be better than an income tax as a way to enforce maintenance of the commons and to provide infrastructure and an educated work-force. (I tend to favor use of taxes as "investment", rather than "money for nothing")

nirvana 14y ago
You're knocking down a strawman. The position is that higher tax rates reduce economic growth. Your evidence does not contradict that assertion. Doesn't even touch it. Further, you're dealing with claims and a study that are ideologically driven... so more precision is required, not less.

tolmasky 14y ago

You began with the question of whether higher marginal tax rates made economic growth "impossible". After finding that there was growth between 1940 and 1980, you should have concluded "no, it does not make it impossible as we have a counter example". This follows and is called induction. But you for some reason chose to then alter the premise and say you proved that high marginal tax rates are not harmful. You have in no way proved this. For all you know without those high marginal tax rates, growth would have been even HIGHER between 1940 and 1980. I am sure you do not believe this to be the case, and that is a very reasonable belief, but understand that it is not proven by this evidence (nor is it disproven mind you). True evidence-based proofs, the way its done with science, requires that you test one variable. In the example above you'd have to have a parallel economy where all else was the same except the tax rate. Unfortunately this is impossible, but this does not mean we get to change what "proof" means. Economics would work much better if everyone came to terms with the fact that it is untestable and was honest with themselves that all opinions regarding it are just beliefs, regardless which side you fall on.