Bernie Sanders's Tax Plan Would Test an Economic Hypothesis - The New York Times - 0 views
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in 2011, the economists Peter Diamond of M.I.T. and Emmanuel Saez of the University of California, Berkeley, drew attention with a paper estimating that the revenue-maximizing income tax rate on high earners — the combined state and federal rate after which further tax increases would actually cause revenue to fall — is 73 percent.
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Mr. Saez, who is perhaps best known by the public for his work with Thomas Piketty on rising income inequality, said a key effect of such a large tax increase would be to push down the pretax incomes of the ultrarich.
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“My feel is that the reasoning behind Sanders’s tax plan is not so much tax revenue generation from top earners but rather make top tax rates so high so as to discourage ‘greed,’ defined broadly as extracting income at the expense of the rest of the economy as opposed to real productive behavior,” Mr. Saez wrote in an email. “I think pretax top incomes would finally start to decline.”
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