Like many of you, my Dad watches Fox and reads the WSJ and sends me emails. Each Monday I get a new set of talking points. Last week it was Socialism, now it is more refined - seems he read an editorial called Obama and the Tax Tipping Point.
The gist is that higher taxes will strip productivity, which he cleverly argues based on research that demonstrates that the size of government and tax rates tend to reach an equilibrium based on productivity. Basically, after four of the largest spending programs in history were put forward by Republicans (Medicare Part D, Iraq, bailout and stimulus packages), he thinks that Democrats will spend more.
So, I decided to just go with his research and see where I could end up. Have economists Allan Meltzer and Scott Richard proven that you shouldn't tax rich people or you will destroy the economy?
My net was that You cannot persist a society with large income disparity and democracy. But follow me after the fold and let me know whether I am full of s**t.
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