Jonathan Chait has a new book on the history of supply side theory, which still manages to influence tax policy despite lacking serious support from economists. One of Chait’s arguments is that tax hikes of a few percentage points can’t possibly have the devastating consequences that people like Grover Norquist suggest, because income tax rates have fluctuated a lot over the 20th century without suggesting a direct relationship to economic growth.
I found some historic tax rates at the income tax article at Wikipedia. It’s suprising to see top tax rates in the 70-90% range up until 1980 – not that this would be a good idea to reinstate.
Link to a 10 page adaptation from Chait’s book on the New Republic site.
