The late Jude Wanniski used to scoff at reports of abnormally high country unemployment, particularly in poor countries. He knew better. Even in the richest ones it’s rare that over 20% of the working capable population can afford to do nothing. In the poorer ones work (often of the backbreaking variety) is generally a necessity for all who are able-bodied. Wanniski knew large swaths of the population weren’t not working as much as high rates of taxation have a tendency to push a lot of work underground.
Which brings us to revived talk of a 70% top tax rate. The latter was the rate in the 1960s, and unserious people who will not be mentioned here are talking legislation meant to bring it back. It’s not just that these attention-seekers aren’t serious, it’s that they deep down know they’re not. This is all about publicity, so they will get none. Only their droolings will be addressed. There’s quite simply no such thing as a 70% top rate.
...With taxes the talk should always be about liberty. Indeed, for members of the right to say nosebleed rates won’t bring in the expected revenue is for them to implicitly say the goal should be to find a rate that would. No, the goal should be to limit in all ways possible what the political class gets to take from us. End of story.
Back to the 70% rate, there’s again no such thing. There wasn’t even such a thing in the 1960s. As Larry Kudlow and Brian Domitrovic point out in their book JFK and the Reagan Revolution, while top tax rates rose as high as 90% in the 1950s, the average tax rate for earners above $100,000 (a lot of money back then) was closer to 36%.
Hopefully this helps explain why politicians clamor for “high” rates of taxation....
They do simply because politicians exist to spend money. That’s why they’re there. You don’t get into politics because you want to not “do something,” rather you get into the field because you do. This explains why government relentlessly grows no matter the political party in power. Of course it does. They’re there to spend, and to amass power....
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