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Good piece from Bloomberg pointing out that Sweden actually has a top marginal rate of almost 70% -- and grass is hardly growing in the streets 1/ bloomberg.com/news/articles/…
I'd also point out that while the US federal top rate is only 37 -- it was 39.6 before the TCJA -- there are also state and local taxes. If you're a high earner in New York City, you pay almost 9% state and almost 4% city tax at the margin 2/
Plus sales taxes -- 4.5% state and 4% city -- also reduce the purchasing power of a marginal dollar earned. Put all of this together and high earned-income individuals (as opposed to capital incomes) pay a marginal rate of 55-60% 3/
On one side, this shows that the disincentive effects of taxes are much less than claimed; are high-income New Yorkers lazy and unmotivated? On the other, it says that the room for further rate increases may be less than some on the left imagine 4/
Overall, however, I think the ability to live with high taxes, in both Stockholm and New York, is the important message. The idea that high taxes are a huge economic problem is supported by nothing except the interests of the people who want you to believe it 5/
Wait, I take it all back. Sean Hannity says that higher taxes on the rich would be terrible because people wouldn't be able to buy yachts. I am not making this up 6/ huffingtonpost.com/entry/sean-han…
