That is because with the lower tax rates, incomes boomed along with the economy, and high income taxpayers had the incentives to pull their money out of tax shelters and invest it in the real economy, fueling the boom while increasing their reported incomes.
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Some cite the period from the end of WWII through the 1950s as demonstrating that our economy could blossom under high income tax rates.
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The UAE has an open economy with a high per capita income and a sizable annual trade surplus.
However, as the economy reaches the high middle-income level, unleashing innovation and industrial upgrading is becoming key to sustainable growth.
Making youngsters forfeit part of their productive or educational potential can depress an economy just as heavy government debt or high income taxes do.
Were the tax shelters that high-earners were encouraged to set up to shield themselves from high income tax rates actually better for building a sustainable, prosperous economy than the combination of low tax rates and no shelters?
Murphy argues that the strong economy of the past few years has disproportionately benefited high-income Americans.
In a 2000 paper, Taxes, High-Income Executives, And The Perils of Revenue Estimation In the New Economy, and a 1997 study, What Happens When You Tax The Rich?
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On the economy, Bush's program of granting incentives to high-income brackets to drive investment and boost demand and job growth might just succeed in priming the pump.
Part of the problem, according to PPIC, is California's high dependency on personal and corporate income tax, a volatile source of revenue that fluctuates with the economy.
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