With the government security, the investor earns $40 after tax, without any risk. With the expansion, the investor would earn $100, but after paying $70 in taxes, she would be left with only $30. She would choose the government security and not the growth-oriented expansion. If the tax rate was only 36 percent, then the expansion would lead to the investor having a net of $64 after taxes. The expansion would be chosen.
That’s not how marginal tax rates work.
.. You know how it works, since you’re using it correctly below.
I don’t like this incorrect use to make a point.
“Higher taxes always lead to more government spending, less individual freedom, a slower growth economy, more Americans dependent on the government and greater income inequality.” — For whom?
The proposed tax rate isn’t for the common individual, is it?
I don’t think you’ve explained your position either. How would it help?
Also — is the proposed tax rate of 70% for individuals or corporations as well?