An interesting data point to consider for those of you interested in the tax revenue discussion we've been having . From 1951 through 1963, the U.S. maintained extremely high marginal tax rates. The lowest rate of federal income tax was 20%, and the highest equaled 91%. The tax structure back then generated revenue equal to 7.7% of GDP. Marginal rates were lowest from 1988 through 1990, when the lowest rate was 15% and the highest rate was 28%. With that structure, federal income taxes brought in revenue equal to 8.1% of GDP. (This information comes from Alan Reynolds' well-sourced piece in the June 16, 2011 Wall Street Journal.)
The point is, the liberal Democratic policy goal of using income taxes for social engineering is extremely inefficient. It lowers tax revenues at a time when the government is deep in debt. The amount of revenue generated is only one small part of the puzzle. What goes unmeasured is the resulting disincentive to work and invest under high marginal tax rates. And yes, this second consideration is vastly more important than merely the technical detail about revenues. But the technical detail about revenue is a clearly proven fact that the tax-'em-until-they-bleed crowd can't ignore.
