Reply #3: excellent article, with some sound arguments [View All]

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a further benefit of higher taxes is a more fiscally sound government. this is of benefit to the private sector, because if the government isn't borrowing so much, it isn't driving interest rates up. it also leads to less political and currency risk, which is also essential for good private sector growth.

another point is that "higher" taxes usually really means a "more progressive" rate structure, i.e., the super-rich might be paying a lot more, but the working class might not be paying all that much more. this means that employers get more bang for the buck hiring more lower-paid workers rather than a few highly-paid workers. the government gets less in taxes this way, so the employer gets more labor dollars to actual laborers this way. this, in turn, means that more people have more disposible income with which to buy, thus spurring further growth.


finally, i have to mention the ludicrously low tax rate on dividends. this is just such an obvious incentive for companies to leverage up and suck the money out to shareholders, taking profit at the expense of leaving companies "hollowed out", to borrow a nice phrase from the article. one push and the company fails, but the shareholders already got their nice dividend....