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Since things are a little slow around here, I've cut and pasted a post I wrote on METAR:

Who amongst us would not like to be rich? Whats the point, however, to strive for that goal, with the risks and hard work if frequently entails, if it is clear that the rewardds will simply be taken away.

Under Eisenhower, there was a progressive income tax under which the top income bracket was taxed at 90%. Since many people misunderstand the concept of progressive taxation, it is worth pointing out that this is NOT 90% of total income, but of those earnings in excess of the next-highest bracket cutoff.

As we now know, it was this misguided scheme that discouraged anyone from aspiring to be rich, or indeed, working at all. As our nation lapsed into a Commie nanny-state with near 85% unemployment, CEOs could be seen in the streets impersonating the indigent, hoping for Great Society handouts. The young Warren Buffett wrote a short annual letter which said simply, "why bother?" and returned to his paper route. Pessimism was most pronounced among plumbers and aspiring plumbers, who cited despair induced by the prospect of marginally higher taxes as an explanation for their refusal to start businesses that would bring them a significantly higher income.

Fortunately, Saint Ronnie slew the progressive income tax in single combat before laying waste to a ravening horde of welfare queens in Cadillacs, and then it was morning in America.

Higher marginal tax rate does not equal "all the rewards of hard work being taken away." It equals "some of the rewards of hard work being taken away." In a few cases it still equals "some of the rewards of hard work being willingly contributed by folks who know their taxes mend potholes and educate kids."
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