Friday 27 January 2012
Yes, you can make money without exploiting the poor, but... ☀
I was (briefly) a guest on a BBC World Service radio program this morning discussing Obama’s state of the union speech and income inequality in general. To my mind, this has always been a no-brainer. My argument is: we’ve done this experiment (of lowering taxes on the rich) twice now, once in the 1920’s and again in the 1980’s (and doubled-down in 2000). We have also done the control experiment. Between 1945 and 1980 top marginal tax rates in the U.S. ranged from 70 to 90%.
The results are clear: high marginal rates correlate with broad-based economic prosperity and an expanding middle class. Low marginal rates correlate with extreme income inequality, reduced prosperity overall, and ultimately, economic catastrophe.
