I had generally considered progressive income taxes to be detrimental to economic growth particularly because multinational data suggests that that is the case.
There is a recent study by the Congressional Research Service that suggests that progressive taxation does not correlate positively or negatively with subsequent economic growth. I know that progressive taxes are not effective at raising tax revenue but the absence of a connection to economic growth comes as a surprise.
I do not accept this material as final or authoritative.
What I have begun thinking is that most rich people, 80 to 90% do not make a contribution to national growth.
The people who make the economic contribution are the ones who start small businesses, since small business of under 20 employees is the main source of employment growth, and those businesses are also the source of innovation.
I have worked with hundreds of these small businesses, and dozens of the most innovative contributors to world commerce.
I can say, for certain, that these people started their businesses for three reasons: they loved their work, they wanted to be their own boss and their innovation was only possible in a new business.
You will note that I never mention the word: rich. Nobody I ever knew started an innovative business in order to get rich.
Therefore when examining the reasons why progressive taxation may be harmful, I will not accept the argument that it will dampen the drive of innovators to start new businesses.
The presence of many rich people may attract immigrants who want to start new businesses but that remains data not available.
Since the mansions of rich people seem irrelevant to economic prosperity and the same is true for fancy cars, I question the tax deductibility of such investments and think progressive taxes on houses on auto fees might not be economically harmful.