Page "Tax" Paragraph 93

Most taxes have side effects that reduce economic welfare, either by mandating unproductive labor ( compliance costs ) or by creating distortions to economic incentives ( deadweight loss and perverse incentives ).

This is a controversial assertion because historical data does not support it.

During the post-World War II period, the United States had a highest tax bracket of 70 % during Roosevelt's presidency and about 90 % during Eisenhower's presidency.

This period saw unprecedented levels of prosperity.

Also intersting to note is that there was no major recession during the high tax years from 1945 to 1980.

The improved economic performance of the economy during high tax periods compared to low tax periods casts doubt on the suggestion that steeply progressive high income taxes are harmful.

There is abundant statistical evidence that the opposite is true.