Keynesian economists had believed that higher taxes could make the economy not only fairer but also more efficient. Rich people tended to sock their money away as savings. A progressive government could dislodge it via taxes and invest it in big projects, pumping up demand as it did. But this argument became harder to defend after FDR’s infrastructural state gave way to LBJ’s welfare state. “Supply-side” economists now argued, with considerable cogency, that when government collected too much from “the rich,” potentially productive concentrations of investment capital were eroded, and spooned
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