Tax Increases and GDP

A new academic paper examines the effects of high marginal income tax rates on the top 1 percent and its effects on income and the economy and concludes that,“A hypothetical tax reform cutting marginal rates only for the top 1% leads to sizeable increases in top 1%’s incomes and has a positive effect on real GDP. There are also spillover effects to incomes outside of the top 1%, but top marginal rate cuts lead to greater inequality in pre-tax incomes.”