Reality Nips Again

No principle is more sacred to conservatives generally and the wingnotosphere in particular than the Capitalism destroying consequences of high marginal income tax rates. John Cole's (h/t Brad Delong, Steve Benen, and Matt Yglesias) chart of the top marginal income tax rate since 1920 shows this to be yet another notion that fails to survive its encounter with reality.

In the real world, it seems that some of the lowest maximum marginal income tax rates occurred before the great depression and in Bush bubble world. Predictions of the economy destroying effects of tax increases proved false in the Clinton boom. I don't advocate 1960s level top rates, but the idea that the relatively tiny increases planned by Obama would destroy the economy are ridiculous.


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