Reductions in top marginal tax rates provide incentives for growth and lead to greater government revenues in the long run. That is not always the case. There is a point on the Laffer Curve at which tax cuts on the top margin stop generating increased income, but we are nowhere near that point now.
Also, via Yglesias, Ramesh Ponnuru at the Corner:
Presumably what they mean is that the top income tax rate is higher than the revenue-maximizing rate, but I’m not sure why they think that it is. Bush’s tax cuts appear to have caused revenue to be lower than it would otherwise have been, which suggests that we’re already below the revenue-maximizing tax rate.
Yglesias thinks this is Ponnuru unleashing dry wit. Maybe I’m misreading things, but to me this is a sign that the National Review gives great severance packages and Ponnuru is trying to get his hands on one. Or more likely he didn’t realize what he was writing, but this was way too sane and data-compatible for the National Review if you ask me. Because the implication is… perhaps its time to raise tax rates, which may raise growth rates and will also, not incidentally, raise tax revenues.
Update… corrected last sentence.