Tuesday, March 13, 2012

The 1%: indifferent about their tax rate

Bruce Bartlett: Would a Higher Top Tax Rate Raise Revenues?

On Friday, Prof. Allan Meltzer of Carnegie Mellon University, a well-known conservative economist, offered a commentary in The Wall Street Journal arguing against policies to equalize the distribution of income.  [Meltzer used the Piketty Saez study, linked earlier here] to say that 'domestic policy can’t be the principal reason for the current spread between high earners and others.'
... If, as Professor Meltzer has shown, the rich get richer regardless of the tax rates, there is no economic reason not to raise the top rate. Perhaps unwittingly, his research confirms that of other economists who say that we could get substantial additional revenues even if the top rate doubled.

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