| sc94597 said: As for the last sentence, can you provide examples? I would say the U.S reached its peak in development and inventions in the late 19th and early 20th centuries when there was a concept of laissez-faire capitalism and Federal taxes were less than 5%. Afterwards, most of the inventions and discoveries came from foreigners who fled Europe during Nazi and Soviet occupations. I think the correlation is likely war with development moreso than spending/taxation (which also correlates with war) and development. |
Allow me to clarify - in talking about "successes", I was referring to economic success, essentially GDP growth. And here's a graph on that topic:
http://media.zenfs.com/en/blogs/thesignal/Top-Marginal-Tax-Rate-and-GDP-Growth.png">
There was more variability back before certain stabilising factors were added in the 80s and 90s, but the highest GDP growth since the end of WWII occurred when the top marginal tax rate was over 90%. And if you look closely, GDP growth often gets boosted in the short term by a tax cut, but it's always short-lived. Growth after tax increases doesn't seem to be reduced.
If you plot tax rates against smoothed GDP growth rate for the period following it, you get an interesting result. Here's a plot of average GDP growth rate for the 8 year period starting with the year on the x axis vs the top marginal tax rate in that year:
Notice that the trend is quite strong - GDP growth rate is decreasing as tax rates decrease.
