Growth and TaxesJuly 16, 2009 at 8:46 am | Posted in American politics | Leave a comment
Look at that graph. Let’s talk about sustainable growth. Note some very interesting things about this graph. When did we have the most sustainable growth in American history? From the 1930s to the 1980s. Where did we have bubbles? The 1920s and the 1990s-2000s. Where did we have a massive difference and disparity between the income of the very wealthy and everyone else? The 1920s and the 1990s-2000s.
When the tax rates on the very rich are low, bubbles form, creating artificial growth that is not only unsustainable but destructive to the rest of the economy. When the tax rates on the very rich are high, sustainable growth occurs where recessions are not as severe and not as destructive to the overall economy.
Tax the rich at high levels. It produces sustainable, manageable, long lasting economic growth. Lower taxes on the rich and you create huge bubbles of artificial growth that will inexorably lead to a massive downturn as the economy corrects itself.