[EMAIL PROTECTED] ([EMAIL PROTECTED]) writes: >Taking the example of Stalin's war on the peasantry in general and the >Ukraine in particular, we see that massive confiscations of income at marginal >rates >well in excess of 100% certainly detered economic activity, to put it rather >mildly.
Mancur Olson claims in his book Power and Prosperity that the marginal income tax rate was effectively zero. The effective taxes were near 100% of what a typical worker in any given position could produce, but workers producing more than expected kept all the unexpected wealth. That created stronger incentives on each person to work hard than in the west, strong incentives to prevent others from working hard, and some incentives for each industry to deceive the system about what a typical worker can produce. There were few problems with the total amount of economic activity under Stalin. The problems were with the goals which that activity satisfied. -- ------------------------------------------------------------------------------ Peter McCluskey | Everyone complains about the laws of physics, but no www.bayesianinvestor.com| one does anything about them. - from Schild's Ladder