Originally Posted by Mr Spock

Mutt the real issue is not really that the rich will take their stuff and sulk , but rather the fact that when tax rates are sufficiently high then you encourage counter productive behavior. For example the wealthy hire advisers and tax consultants to look for ways to reduce their tax liability. A lot of time and resources are wasted doing this.

Secondly when taxes are punitive you find that tax compliance suffers , people actively hide income and don't declare it.

Thirdly they just reduce their working ours , take the French as an example , those idiots have increased increase that tax rate for earnings over a million Euros to 75% , now what a lot of guys will do in that bracket is cut back on the number of hours worked so that they don't get penalized by that threshhold. If i know that the next dollar I earn is going to taxed at a criminal rate , I would rather cut back on my hours and spend time with my kid , family or mistress.

This is not just a thumb suck , but proven finance theory. So at the end of the day a higher marginal rate can result in the fiscus earning even less in revenue than they would with a lower marginal rate. All of the behaviors I outlined will result in less output and less jobs.

The answer is a lower rate with less deductions and loopholes etc that is simple to administer and doesn't require the employment of a CPA.