In no way do I endorse a 90% marginal tax rate (with the AIG debacle excepted).

So let’s get this out of the way again – IN NO WAY DO I ENDORSE A 90% MARGINAL TAX RATE.

That being said, let’s look at one of the most common complaints that wealthy Americans use to justify lowering their own taxes. It will cause me to be less productive because Uncle Sam will take a bigger share of my earnings so that I’d rather stay at home than earn more money.

We can look at historical examples- Reagan had a 50% marginal tax bracket on high earners. Eisenhower’s highest tax bracket was 90%+. In those cases, Americans were still very productive. Despite the heavy hand of taxation, rich people were plentiful under those high tax rates.

But since history is often a bad argument when debating someone that has no knowledge of it, perhaps a better reason might be simply a free-market argument. If rich people are less productive under a higher tax rate, that allows other people to compete for the business that is being turned down.

If Republicans are so enamored with supply-side economics and the invisible hand of unfettered capitalism, then we should pose the question: If you voluntarily reject additional customers because your tax rate is too high, will it raise other people’s earnings if they accept the business that you turn down?

If so, isn’t that a good thing for America?

And don’t get distracted by a socialism argument. It’s not socialism when it’s a free market decision based upon supply and demand. Simply put- if a higher tax rate discourages you from working to achieve more, then someone else will fill that role that you declined. And, both parties get exactly what they want.

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