Prosperity and Taxation: What Can We Learn from the 1930s

May 10, 2021 by Dan Mitchell

The United States conducted an experiment in the 1980s. Reagan dramatically lowered the top tax rate on households, dropping it from 70 percent to 28 percent. Folks on the left bitterly resisted Reagan’s “supply-side” agenda, arguing that “the rich won’t pay enough” and “the government will be starved of revenue.” Fortunately, we can look at IRS data to see what happened to tax payments from those making more than $200,000 per year.

Lo and behold, it turns out that Reaganomics was a big success. Uncle Sam collected five times as much money when the rate was slashed.

Source: Prosperity and Taxation: What Can We Learn from the 1930s | International Liberty