Wednesday, August 8, 2012

Do Marginal Tax Rates Have Anything To Do With Prosperity?


I ran across this chart in today's NYT. There doesn't seem to be any relation between the relative health of an economy and its top marginal tax rates. I'm sure that most Americans would be surprised to learn that top earning Canadians are taxed at a lower rate than we are. Russians, whose economy barely reaches 1st world status, are taxed lowest of all. The German and British economies have identical rates but seem headed in opposite directions. The US economy prospered during the Clinton era after taxes were increased and faltered in the wake of the Bush era tax cuts. Is there any reason to believe that tax policy, especially at the margins, will have much of an effect either way?


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