From Miller’s Genuine Draft:
To some on the left, the golden age of America was the 1950s. The post-war boom era saw high tax rates as well as higher rates of unionization. Some have taken this historic evidence to assert that higher tax brackets must result in a more robust economy. Former Labor Secretary Robert Reich and collective bargaining sympathizer frequently opines for a return to the time of housewives and Leave It To Beaver:
Higher taxes on the rich would hurt the economy and slow job growth. False. From the end of World War II until 1981, the richest Americans faced a top marginal tax rate of 70 percent or above. Under Dwight Eisenhower it was 91 percent. Even after all deductions and credits, the top taxes on the very rich were far higher than they’ve been since. Yet the economy grew faster during those years than it has since.
Surely this writer isn’t the only one confused over a self-identified progressive pleading for a return to the policies of half a century ago.
Invoking Bastiat’s classic case of the "unseen," any economic observer, when encountering historical instances such as this, must always attempt to deduce if correlation does in fact equal causation. In a recent blog post from Timothy Taylor highlighting a report from the Tax Policy Center, the true effect of high tax brackets is uncovered…
More on taxes: