In “A Critical Look at the Economic Argument for Taxing Only Labor Income,” I challenge the tax substitution argument, which according to accepted wisdom fairly establishes that it is best to tax only labor earnings. A portion of Critical Look is directed at Professors Bankman and Weisbach's...

Higher Marginal Tax rates in many cases have actually helped the economy. The boom after WWII saw marginal rates as high as 91%. The Clinton administration increased taxes to 39% and the economy took off. When the Bush administration lowered the tax to 35%, the economy sank and deficits took...