How do you define “just redistribution”? Probably as one that doesn’t take from you

I don’t know anybody who is suggesting that we revert to the 91% top rate of the Eisenhower years, but the current rate is too low if we want to discourage yet more crazy speculative activity. Effectively cutting the payroll tax would be even more helpful.

If you hoard money it leads to deflation not inflation. Keynes banana economy illustrates this. Increased demand for money is inherently deflationary not inflationary. Your argument is hard to understand because it seems like your confused. Increasing money supply is inflationary. Increasing credit is generally inflationary since banks since loans result in more money.

Additional demand for something increases its price whereas increasing supply for something decreases its price. When the price of money (i.e. the goods required to purchase a dollar) increases this is called deflation and the reverse is called inflation. When you go to a grocery store you can think of it as the grocery store purchasing money from you using food.

He never mentioned socialism but you did. Republicans calling Obama a socialist is bad. But you talking about socialism when someone brings up a reasonable criticism of Obama is just as bad. BTW, it does not bode well for reasonable discussion when you get basic facts wrong. Obama will not restore the tax burden of the top 0.1% to Clintonian levels…he will increase it far beyond that. If Obama only rescinded the Bush tax cuts then you would be right. But he is forcing the rich to pay for social security. This is a massive tax increase which might not even increase tax revenues if it puts us on the wrong side of the lafler curve (Matt describes this above).

“The great expansion of the American economy in the 30’s, 40’s, and 50’s took place when the highest marginal rates were astronomically high by current standards.”

You need to re-read your history books. The American economy contracted by over 50% during the 30s alone. We also had recessions during the late 40s and 50s. The tax hikes (among other bad policies, ex. contraction of the money supply by 33%, hike in tariffs) of the early 30s took us from a recession to a depression.

Take a simple, albeit extreme example: suppose we live in a society where we can consume either pizzas or hamburgers (not a very healthy place . Both hamburgers and pizza’s cost $10, and equal amounts of both are consumed. Now suppose a ‘pizza tax’ of $1000 is imposed. Pizza consumption would plummet to zero, pizza production would fall and no pizza tax revenue would be collected. Additionally, consumption of hamburgers would skyrocket.

Now slowly decrease the pizza tax to say $10 (so that pizzas now cost $20). Pizza consumption would rise, but it would still be less than if there were no pizza tax in the first place. People would simply consume more hamburgers because it was more economical.

So it is with work. If you impose taxation on work (income tax) of say %100 people will not work, they have no economic incentive to do so (they will have an awful lot of leisure time however). If anything, the experience with communist countries backs up this argument. If you raise income taxes to %100 (effectively communism) labor supply will diminish and economic growth will drop to zero. Now lower from 100% to something less than %100 and people will work, just not nearly as much as if they had no income tax at all.

Of course, with no income tax there would be a huge drop in government revenues, so that is not optimal either. The key is to find the tax rate that optimizes both labor supply (hence economic growth) and tax revenues.