Mankiw also points out that the very richest people—the ones who’d been paying 70% on the top tranche of their income—did contribute more tax revenue after Reagan’s tax cuts.* That leads to the somewhat vexing possibility that the way to maximize government revenue is to jack up taxes on the middle class, who have no choice but to keep on working, while slashing rates on the rich; those guys have enough stockpiled wealth to make credible threats to withhold or offshore their economic activity, should their government charge them a rate they deem too high. If that story’s right, a lot of
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