http://www.econlib.org/library/Enc/M...lTaxRates.html
some quotes:
Numerous studies, ably surveyed by Karabegovic et. al. (2004), have found that high marginal tax rates reduce people?s willingness to work up to their potential, to take entrepreneurial risks, and to create and expand a new business: ?The evidence from economic research indicates that ... high and increasing marginal taxes have serious negative consequences on economic growth, labor supply, and capital formation? (p. 15).
Political authorities saw that other national governments fared better by having tax collectors claim a medium share of a rapidly growing economy (a low marginal tax) rather than trying to extract a large share of a stagnant economy (a high average tax). East Asia, Ireland, Russia, and India are a few of the economies that began expanding impressively after their governments sharply reduced marginal tax rates.