“Since the adoption of heavy…surtaxes…, the Treasury has repeatedly called attention to the fact that these surtaxes are excessive; that they have passed the point of maximum productivity and are rapidly driving the wealthier taxpayers to transfer their investments into…tax-free [shelters] which compete so disastrously with the industrial…securities upon the ready purchase of which the development of industry and the expansion of foreign trade intimately depend.
“It seems idle to speculate in the abstract as to whether or not a progressive income-tax schedule rising to rates in excess of 70 per cent is justifiable. We are confronted with a condition, not a theory. The fact is that such rates cannot be successfully collected….
“It seems idle to speculate in the abstract as to whether or not a progressive income-tax schedule rising to rates in excess of 70 per cent is justifiable. We are confronted with a condition, not a theory. The fact is that such rates cannot be successfully collected….
If you believe people work less when their efforts return less, and that they work more when their efforts return a proportional benefit (a motive that is shaped of course by necessity - which is to say, if you have "a lot" you can afford to be more selective about what efforts you venture than you could if you are just working to avoid starvation) - then you don't need statistics to tell you that if tax rates are higher, it will motivate folks to invest, spend and work differently to avoid the penalty of the higher tax rates.
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