Are You Listening, Obama, The Ghosts of Hoover and FDR?

Economist Antony Davies from Duquesne University did a regression analysis (from 1950 to today) on the relationship between the top marginal income tax rate and federal revenues. What he found was that the higher the marginal tax rate is, the less that the government collects per person. So, for instance, when the top tax rates were 91% and 77% in 1954 and 1964, respectively, the average amount of revenue collected by the federal government was $2,600 per person, and when the top tax rate was 50% in 1984, that amount had grown all the way to $5,700 per person, a 119% increase.............................................................................................Now, there's obviously a point of diminishing returns involved. You can't lower the top tax rate to something like 2% and get additional revenue that way (as the Laffer Curve purely points out). But it does show that this whole "we gotta tax the rich" mentality isn't necessarily the most optimal method of raising revenues............................................................................................P.S. He also examined the relationship between revenue and other forms of taxation. His findings here were that capital gains and corporate taxes also have a negative relationship but that payroll taxes DO have a positive relationship (i.e., the higher the rates, the more the revenue - this, though there could be a modest uptick in unemployment; a couple tenths of a percent).