sneerpiece:

“People behave differently when tax rates are high as compared to when they are low. With low tax rates, they take their money out of tax shelters and put it to work in the economy, benefitting themselves, the economy and government, which collects more money in taxes because incomes rise.”

EDIT: reasons, maybe

“Past a certain income level, there are so many tax breaks written into the system that those people get away with paying less taxes than most people.”

It does make sense. It just doesn’t happen.

When the top marginal tax rate was 91% in the 50s, and the government was engaging in the largest public works project of all time, we reduced the federal debt level from 120% of GDP during wartime down to 50% (its average level under Reagan). A 91% tax rate? Why wasn’t the entire population of Orange County driving to Grand Cayman to deposit their paychecks? Where were the breadlines and the choked-out innovative business dissolving into socialist muck?

People invested inside America anyway for a number of reasons, most of them ignoble: tariffs, transportation costs (which have dropped dramatically in the age of oil subsidies), plain old jingoism. Who cares: the point is that they did not behave with the dispassionate Economic Rationality that the above paragraph describes.

The first paragraph of your statement contains a silent “should”. “People behave differently”, is wishful thinking. The writer thinks people should behave differently, in order to support the writer’s political and economic ideology. But people do not. Deficit spending works in actual history, that actually happened.

(Source: riograndegorgeous)