I have been meaning to write a post on why taxing the rich will not get us out of the fiscal mess we are in. Fortunately Alan Reynolds has done the work for me in a piece in the Wall Street Journal. The interesting thing is that no matter what the actual tax rates are, the amount of revenue that the government receives remains about the same, as you can see in this chart.
Or as Alan Reynolds writes;
All this nostalgia about the good old days of 70% tax rates makes it sound as though only the highest incomes would face higher tax rates. In reality, there were a dozen tax rates between 48% and 70% during the 1970s. Moreover—and this is what Mr. Reich and his friends always fail to mention—the individual income tax actually brought in less revenue when the highest tax rate was 70% to 91% than it did when the highest tax rate was 28%.
There is more worth reading. If I get the time, I should see if I can find the actual government revenue over the years, in dollars adjusted for inflation and compare it to tax rates.
In any event, it should be obvious, but somehow it isn’t, that the problem is not that we are not taxed enough, it is that the government spends too much.