[southernmissouri2007]

My question is How high can tax rates go is it true can tax rates can't go past 100% because 100% would be all of a person's Income therefor if we have a Progressive Tax or a Flat Tax the tax rates can't go past 100% the reason Im asking this question is because in the United States of America we have had 90% tax rates than 70% tax rates on the Rich/Wealthy and we still had Capitalism the Tea Party people seem to think that a Progressive Tax System equals Socialism which makes no sense to me because Adam Smith supported Progressive Taxes in his Book the Wealth of Nations and he was a Capitalist right ?

http://en.wikipedia.org/wiki/Progressive_tax

http://en.wikipedia.org/wiki/Adam_Smith

http://en.wikipedia.org/wiki/The_Wealth_of_Nations

[nucklepunche]

First of all in the days when we had 90% tax rates and 70% tax rates most people never paid those rates. There were a lot of write offs. Still we had higher taxes than today overall and we survived. The reason is that taxes have virtually nothing to do with economic growth except at the extremes, it all rests on aggregate demand meaning how much consumers spend. Supply siders will tell you we need to cut taxes on the "job creators" to get them to "invest" but this is far from it. What you need is to get consumer demand going and the only way to do this is through good paying jobs. Adam Smith was indeed a capitalist but far from dogmatically laissez faire.

[Paradigm]

Someday I plan to post the equations that show how the rate of return on capital is the same after taxes as before taxes, unless there are exemptions, in which case it's actually higher after taxes. Not today, however. I'll get to it eventually.

[CounterChaos]

Someday I plan to post the equations that show how the rate of return on capital is the same after taxes as before taxes, unless there are exemptions, in which case it's actually higher after taxes. Not today, however. I'll get to it eventually.

You have definitely peaked my interest there Paradigm - I would like to see these figures too...Cheers

[uglyduckling]

http://en.wikipedia.org/wiki/Laffer_curve

past a certain point, the higher the tax rate, the lesser the revenues. True because of tea-party argument of "stifling economy", but especially because of people saying "fuck this" and not paying their taxes.

usually that happens immediately before the first, cause they begin hoarding large amounts to escape the tax collectors, which can then no longer form part of the normal economic cycle