patrick.net

Excluding googles 57 versions of sex is gender racism
HappyGilmore says

So, all men aren't created equal then?

HappyGilmore says

So, all men aren't created equal then?

Neither individuals nor groups are born with the same gifts. Inequality then begets more inequality. Its an enormous issue that no state or economic system has solved. The closest we get are within small, homogeneous societies. These small groups are effectively modernized tribes, with most people holding the same values and affinity for group loyalty.

(Now ask yourself if allowing in murderous migrants who refuse to assimilate helps of hurts these small modern tribe societies. Compare Sweden and Iceland for real world experiment.)

Limiting voting rights to those land owners who had skin in the game wasnt a terrible idea. Elitest as fuck, but it worked due to the shared value system amongst the landowners.

CBOEtrader says

Neither individuals nor groups are born with the same gifts

I don't think the Founders perceived the right to vote as a gift.

CBOEtrader says

Limiting voting rights to those land owners who had skin in the game wasnt a terrible idea.

Who doesn't have skin the game of life?

HappyGilmore says

I don't think the Founders perceived the right to vote as a gift.

Yes I am aware I took that in a different direction than you intended.

HappyGilmore says

Who doesn't have skin the game of life?

No one. Neither would land owners be the most applicable modern day interpretation of that concept. Goran is pondering if net worth is a better proxy for voting on tax issues only. If we had the constitution back protecting against income taxation, we wouldn't need to worry about this.

of course, there is a case to be made that the resulting unequal load balancing between states of our previous tariff based economy is why we had a civil war.

taxation is destruction one way or another. i dont pretend to have the answer

I have long believed that people paying too little in taxes cannot vote, period.

CBOEtrader says

of course, there is a case to be made that the resulting unequal load balancing between states of our previous tariff based economy is why we had a civil war.

A very poor case that is easily disproven.

CBOEtrader says

Goran is pondering if net worth is a better proxy for voting on tax issues only

Yep, and I'm just pointing out that his pondering seems to be against the very principles this country was founded upon.

HappyGilmore says

Yep, and I'm just pointing out that his pondering seems to be against the very principles this country was founded upon.

Like the 2nd amendment?

Sniper says

Like the 2nd amendment?

No, I'm fine with guaranteeing militias the right to bear arms.

HappyGilmore says

It would have nothing to do with competitiveness.

Why?

If the corporate tax rates in comparable markets are much lower, why would a company invest into the U.S?

HappyGilmore says

Here's a table with the best GDP growth years and their corresponding top tax rate. Sure seems like higher tax rates HELP growth.

Was it the high tax rate, or a globally interdependent competitive economy?

bob2356 says

Funny, I thought sales taxes, property taxes, corporate taxes, FICA, taxes, excise taxes, etc., were also part of the tax burden in the United States. Despite that deceptive use of the word taxes in the name apparently in the world according to Goran they are not. You learn something new on patnet every day.

It would appear that some people believe that the no taxation without representation principal, which was the founding principal of the country, is some sort of a flexible sliding scale that can be used as a pick and choose exercise depending on what partizan political point they want to make.

You're completely off base here.

I'm simply talking about the "fairness" of voting a higher percentage of taxes into your own pocket than you contribute via taking it from people who earn more, aka a Progressive taxation plan.

People keep bringing up the Constitution, but the Constitution was created way before there was a Federal income tax.

Now that one exists, I think it's a valid question.

Goran_K says

Why?

If the corporate tax rates in comparable markets are much lower, why would a company invest into the U.S?

I thought we were talking about individual tax rates. When did we switch to corporate rates?

But, high corporate rates have actually been shown to lead to more investment as investment is pre-tax. So, investing lowers taxes.

Goran_K says

Was it the high tax rate, or a globally interdependent competitive economy?

It's pretty interesting that the top 20 best GDPs all occur under high top tax rate environments. Pretty hard to argue that high top tax rates lower growth.

Goran_K says

People keep bringing up the Constitution, but the Constitution was created way before there was a Federal income tax.

But the Constitution very clearly states that everyone is created equal under the law. Rich people don't get extra votes due to their wealth.

To even consider something like the OP is disgusting, IMO. It would lead to a permanent aristocracy (I guess we're headed there already, but this would speed it up considerably) as rich folks don't want the lower classes to have opportunity to join them.

HappyGilmore says

But, high corporate rates have actually been shown to lead to more investment as investment is pre-tax. So, investing lowers taxes.

This is completely false.

High corporate tax rates universally suppress capital investment. This is why the EU flounders and why the Asian Tigers were able to build massive economies.

HappyGilmore says

It's pretty interesting that the top 20 best GDPs all occur under high top tax rate environments. Pretty hard to argue that high top tax rates lower growth.

None of them are 90%.

HappyGilmore says

But the Constitution very clearly states that everyone is created equal under the law. Rich people don't get extra votes due to their wealth.

Yes, equal.

Equal would be a flat tax.

Unequal would be a progressive tax scheme.

Goran_K says

his is completely false.

High corporate tax rates universally suppress capital investment. This is why the EU flounders and why the Asian Tigers were able to build massive economies.

No, it's true. Higher rates encourage capital investment to reduce tax burden.

Goran_K says

None of them are 90%.

lol--this is true.. One of the best years was 94%, and 4 of the best years was 91%. So 25% of the best GDP years occurred when the top tax rate was > 90%.

Goran_K says

Yes, equal.

Equal would be a flat tax.

Unequal would be a progressive tax scheme.

Nope. Equal is everyone's vote having the same weight in electing officials.

Reality says

His wealth is in his ownership of Amazon, the stocks of which have been bid up on the marginal transactions, just like the 5% transactions of housing stock every year decides the price of the housing stock. The owners of stocks and houses (and almost all other productive capitals) are not at all piling money up in their homes equal to their asset value . . .

That's exactly what I mean. The rich accumulate productive assets while the poor accumulate debts - or at least struggle from pay check to pay check.
Cash is chasing and inflating assets, not products.
Main street deflation is enabling wall street inflation.

This is why inequalities are rising. And it's just not true that the growth tide is raising all boats.

I repeat: the key bottleneck to higher growth is the ability of a large part of the population to spend more.
The industry could and would produce more, had people more money to spend.

HappyGilmore says

Nope. Equal is everyone's vote having the same weight in electing officials.

Uh no. The electoral college does not give 1 vote for 1 vote equivalency since California's votes do not give them proportional voting power to say Iowa. This is a built in mechanism to prevent centralized power.

Also the Constitution was not about "equality in votes" it was about protecting individual rights.

Being able to vote someone else's money into your pocket is not equality or individual rights. It's redistribution of someone's else's wealth.

Goran_K says

Uh no. The electoral college does not give 1 vote for 1 vote equivalency since California's votes do not give them proportional voting power to say Iowa. This is a built in mechanism to prevent centralized power.

lol--that's the technicality you want to base your argument on? There is exactly 1 election where that matters. But, theoretically, CA votes have the same proportional voting power as Iowa. That's why CA has many more electoral votes than Iowa.

Goran_K says

Also the Constitution was not about "equality in votes" it was about protecting individual rights.

Exactly--the right to elect ones representatives. That was pretty fundamental.

Goran_K says

Being able to vote someone else's money into your pocket is not equality or individual rights. It's redistribution of someone's else's wealth.

Luckily that's not what we're talking about here. We're talking about the right to vote for who would represent them.

There were several interesting surveys about millennials. A national Reason-Rupe survey found that 53% of Americans under 30 have a favorable view of socialism compared with less than a third of those over 30. Moreover, Gallup has found that an astounding 69% of millennials say they’d be willing to vote for a “socialist” candidate for president.

Yet millennials become averse to social welfare spending if they foot the bill. As they reach the threshold of earning $40,000 to $60,000 a year, the majority of millennials come to oppose income redistribution, including raising taxes to increase financial assistance to the poor.

https://www.washingtonpost.com/news/in-theory/wp/2016/03/24/millennials-like-socialism-until-they-get-jobs/

HappyGilmore says

There is exactly 1 election where that matters.

Only if you cant count... Or perhaps you think rhode islands senators receive the same number of votes as a california senator? LOL, liberals

1789: The Constitution grants the states the power to set voting requirements. Generally, states limited this right to property-owning or tax-paying white males (about 6% of the population).

If they'd bring this back sans the race and gender specifications I'd be supremely happy.

HappyGilmore says

I agree that there was non-cash benefits during those times, but I'm pretty sure that there is a decent correlation between top tax rate and actual amount of tax paid.

No, there isn't such a correlation. The overall federal tax collection as percentage of GDP has been staying at around 20-25% in the post-WWII era. Surprisingly (sarcasm on), employers and high-income (smart) people are not as stupid as the dumb people would like to project: just sitting there and taking higher tax rates on the chin instead of looking for legal ways to avoid paying higher taxes.

As GDP includes a higher and higher component of government spending (due to deficit spending), the overall tax collection as percentage of the real economy (nominal GDP minus government spending) has been increasing over the decades despite declining top marginal tax rate compared to the 50's and 60's. The next increase in tax collection (as percentage of the real economy, not GDP) is one of the reasons for our economic stagnation in recent decades.

But, it's interesting that inequality was much lower during times with high top tax rates. GDP growth was much stronger. Tax burden was spread out much more evenly. There was a much stronger middle class. Real wage growth was much stronger. Families could be comfortable on one income. None of those are coincidental.

Almost all of the positives you cited back then were due to the fact that most women were not in the work force! The so-called inequality in recent decades is largely due to the household falling apart due to divorce or not getting married, resulting in what had been the income of one family now being split into two families, therefore lower household income at the bottom end (now rapidly expanding to include the middle class). Why has that happened in recent decades? Because women have joined work force, and don't feel being stuck with men from whom they have taken jobs and bid wages down! Women initial 70-80% divorces, and low-income single-mothers are obviously responsible for getting pregnant and keeping babies despite their own inability to pay for the children themselves.

GDP growth higher in the 50's and 60's than usual peace time was due to out-sized government spending fighting the Cold War. That was not a good thing. That out-sized government spending eventually led to the run-away money-printing that forced the US government default on the Bretton Woods promise to the world economic system, and necessitated the Petro-Dollar System that eventually led to the Middleast set on fire as we know today.



HappyGilmore says

Also, if GDP growth is your primary goal, you ought to love the actual Nazi Party, which produced the highest GDP ever recorded in the modern world: 30% annual GDP growth in the first few years after Hitler and Nazi Party took power in Germay

lol--so GDP growth is a bad thing now?

GDP growth is a bad thing when it is due to government spending and central planning. It is quite unfortunate that you chopped out the detailed explanations in my previous post, not only using the Nazi example, but also the medical expense example under non-competitive market conditions. The inventor of the GDP/GNP concept made it quite clear that GDP/GNP is not an indicator of real economic size, but debt servicing capacity (when government prints money and spends it into the economy, it's essentially issuing chips that cancel previous debts, not necessarily generating any positive economic result). John Maynard Keynes borrowed the GDN/GNP concept in order to put together his fraudulent "macro-economics." Keynesian aggregates is about as silly as this: you and Jeff Bezos have an average net-worth of $50Billion, therefore if the government gives Bezos another $10B, you and him now average $55B, therefore you should feel better! It's a neat parlor trick to fool the bottom 90% in intelligence into advocating policies that are detrimental to themselves!



HappyGilmore says

The US averaged 2.8% productivity growth from 1948 - 1973. (In case you forgot--that was when we had high top tax rates.)

https://www.bls.gov/lpc/prodybar.htm

You are conflating GDP vs. real economy, which has to strip out all government spending. The most benign view of tax and government spending is that they are a form of societal insurance . . . All insurance expenses are usually cost items in a business' accounting and have to be subtracted before arriving at net profit. So a rough estimate of the size of real economy should be the nominal GDP - tax collected (insurance premium paid) - government deficit (the net loss run up by the government, as another player in the economy). In other words, GDP minus all government spending. All government spending is the cost of doing business (insurance cost) for all other businesses and individuals in the economy. The 1948-73 real economic growth was much less than the cited 2.8% when we subtract the rapidly expanding government spending. That's explains why the US government had to default on the "Gold Window" by 1973, despite the fraudulent GDP print that you cited.

HappyGilmore says

Sorry--just want to make sure I understand this. You are equating someone who maybe lost their job and is having some tough times with a slave?

Nope! A motivated person can find another job or start a new business to serve customers directly. He doesn't have to sit around and collect welfare. Those chronically collecting welfare are wards of the state, no longer independent economic actors capable of making sound decisions, not even for themselves, much less on behalf of others as in voting.

So, all men aren't created equal then?

When each man is born, he is not entitled to vote. That's why infants are not allowed to vote.

Only those mature, independent and capable of making sound decisions in their own daily lives should have the right to vote on public policies. Otherwise, voting would become a perverse privilege: incompetents gaining the privilege to rob the competent.

That's the same reason why criminals in jail are usually not allowed to vote, despite all men are created equal in principle.

Heraclitusstudent says

Reality says

His wealth is in his ownership of Amazon, the stocks of which have been bid up on the marginal transactions, just like the 5% transactions of housing stock every year decides the price of the housing stock. The owners of stocks and houses (and almost all other productive capitals) are not at all piling money up in their homes equal to their asset value . . .

That's exactly what I mean. The rich accumulate productive assets while the poor accumulate debts - or at least struggle from pay check to pay check.
Cash is chasing and inflating assets, not products.
Main street deflation is enabling wall street inflation.

This is why inequalities are rising. And it's just not true that the growth tide is raising all boats.

I repeat: the key bottleneck to higher growth is the ability of a large part of the population to spend more.
The industry could and would prod...

The statement "The rich accumulate productive assets while the poor accumulate debts" is incorrect. How much debt can a poor person accummulate? A few thousand dollars? before the lenders would cut him/her off, or he/she can discharge the debt via bankruptcy. An average millionaire in SFBA has at least multiple-six-figure debt, usually including a mortgage $500k or more. In the highly leverage economy that we live in, the vast majority of assets have associated large debts. Government spending and intervention subsidizes this leverage, which makes successful speculators/gamblers win faster and unsuccessful gamblers lose faster.

As for people who spend more than they earn, that only shows their own financial ineptitude. Government borrowing in the name of the public (i.e to be paid back via future taxes) to subsidize the inept will only serve to strip resources from the competent middle class and give them to the incompetent poor and rich alike. For example, when government subsidize the housing of those making less than $30k, the subsidy would make renting cost higher for those already making around $50k-70k, while benefiting landlords and bankers making much more than that. It's impossible to subsidize the lives of the 99% to bring it to the same level as the top 1%; what subsidizing the bottom 20% does is making life more difficult in the 20-50 percentile, while enriching the top 0.01% who get to collect guaranteed interest on government debt/deficit on top of being paid to "help" the bottom 20% at the expense of the next 30-50%.

"The industry could and would prod..." is clearly false when the majority of a subsidized household's expenses consist of items limited in supply due to regulatory limitations: housing, medicine, education, etc., the categories that have witnessed the highest price inflation in the last half century and are impoverishing the middle class (just as predicted in the above paragraph).

Goran_K says

Should poor people be allowed to vote on tax policy?

Of course not. Screw those poor people.

Reality says

No, there isn't such a correlation.

Yes, there is. Despite your efforts to distract and move the goalposts, the 1% paid a higher % of their income as taxes when rates were 90% then they do now. There is a correlation between one's tax rate and how much tax he pays.

Government spending in the 50s and 60s increased at the same rate as usual. The trend line is not sharper during those decades.

Reality says

GDP growth is a bad thing when it is due to government spending and central planning

Good--since that wasn't the case in the years with high top tax rates and high GDP, then my point stands.

Reality says

The 1948-73 real economic growth was much less than the cited 2.8% when we subtract the rapidly expanding government spending. That's explains why the US government had to default on the "Gold Window" by 1973, despite the fraudulent GDP print that you cited.

OK then--I've shown data to support my point. You've shown nothing. How about providing some data showing the "true" growth.

Especially considering that government spending was increasing at the same rate back then as it is now.

HappyGilmore says

How about providing some data

Ha Ha Ha, providing "data"..

that's awesome.

Sniper says

Ha Ha Ha, providing "data"..

that's awesome.

I know--none of the Trump supporters ever provide data.. It is humorous.

HappyGilmore says

Sniper says

Ha Ha Ha, providing "data"..

that's awesome.

I know--none of the Trump supporters ever provide data.. It is humorous.

HappyGilmore says

Reality says

No, there isn't such a correlation.

Yes, there is. Despite your efforts to distract and move the goalposts, the 1% paid a higher % of their income as taxes when rates were 90% then they do now. There is a correlation between one's tax rate and how much tax he pays.

I wasn't the one moving the goal posts. I was pointing out that higher top marginal tax rate doesn't translate to more taxes collected. Here is a more detailed article on this topic:

https://mises.org/library/good-ol-days-when-tax-rates-were-90-percent

When top brackets had exorbitantly high rates, people simply sought different ways of compensating their most talented employees and/or recognized income differently. Only a tiny number of people (not top 1% but more like 0.001% of the population) ever paid those top brackets in each of those years when top brackets were close to 90%.

On top of that, the idea that taxing the top 20% to 1% more would make the economy and society better is simply wrong! The top 1% is 3,000,000+ people in the US. That's $3,000,000+ possible employers deploying their own earned money in market competition. Compared to that, the Congress has only about 500 people, plus a dozen cabinet-level officers in the White House, plus a few thousand staffers and a few tens of thousands of lobbyists surrounding them. That's two orders of magnitude (100x) more concentration of power! compared to the original 3,000,000+ people that make up the top 1%. Increasing taxation is essentially ripping off the top 20% to top 1% and concentrate the power and resources to the top 0.01%! It should be little wonder that the economy has stagnated as the government spending as percentage of GDP grew in the past half century compared to earlier times.

Government spending in the 50s and 60s increased at the same rate as usual. The trend line is not sharper during those decades.

It is interesting that you picked 1948 as your starting year (or more precisely, the talking points brainwashing the public that you have been reading start with that year). Just before that, 1946-47 saw a severe recession. 1946 saw an 11% decline in GDP, almost as drastic as at the depth of the Great Depression (1932, 12% decline). Before the introduction of Keynesianism, dating back to at least the beginning of the Bank of England, circa 1700, every major war was followed by monetary contraction in order to soak up the excessive liquidity/inflation during the wars. The so-called "trend" you see after Keynesianism was perpetual war-footing; Paul Krugman hinted at the scheme when he advocated an imaginary war against Martians at the end of the Great Recession nearly a decade ago. The Cold War launched in 1948 was that "imaginary war" implemented on planet earth. By 1973, the perpetual war footing had resulted in run-away inflation and the near-collapse of the economy. That's why Nixon's first priority was "Detente" with major Cold War rivals.

Reality says

GDP growth is a bad thing when it is due to government spending and central planning

Good--since that wasn't the case in the years with high top tax rates and high GDP, then my point stands.

You can look up the growth of federal government spending during 1948-1973. The annual growth rate was around 6% annual rate (a little more than 4x over 25 years), while the GDP (combining both the real economy and the government waste) only grew at about 2.8% annually. That's why, despite your love for those years that you never lived personally, the cumulative effect of those 25 years was the US government having to default on the obligations of the post-WWII world financial system (Bretton Woods) and the Americans on the verge of facing run-away inflation and stagnation.

HappyGilmore says

Reality says

The 1948-73 real economic growth was much less than the cited 2.8% when we subtract the rapidly expanding government spending. That's explains why the US government had to default on the "Gold Window" by 1973, despite the fraudulent GDP print that you cited.

OK then--I've shown data to support my point. You've shown nothing. How about providing some data showing the "true" growth.

Especially considering that government spending was increasing at the same rate back then as it is now.

My apologies for assuming the relevant data is at the finger tip of anyone bothering to look up. I was pointing out the far more important aspect about how to interpret the data in your cited GDP statistic. GDP statistic includes both real economy and government waste (simply because GDP was designed as measure of debt service capacity; government being the enforcer of debt contracts get to issue new chips for cancelling existing debt; so both new economic/productivity growth and government printing can serve to zero out debts). Since the rich individuals and corporations tend to take on far more debts than the poor who simply don't have the credit worthiness to get as much loans to begin with, those newly issued chips through government spending benefit the rich and well-connected. GDP statistic is just a mind-game to fool the bottom 90% in intelligence.

When you look up government spending in 1948 vs. 1973, you'd notice that the latter is more than 4x more than the former, so the annual growth rate was about 6% (use Rule-of-72 or use a scientific calculator capable of exponentiation), contrasting with what you cited as 2.8% annual GDP growth during those 25 years. Let's not forget the 2.8% number includes that 6% cancerous growth, so the real economy grew at much lower rate.

The rot was already started in 1948. The degeneration accelerated in 1973 when the money became pure fiat after closing of the "Gold Exchange Window." Concentration of power through government taxation and government spending is the fundamental problem.

Reality says

My apologies for assuming the relevant data is at the finger tip of anyone bothering to look up.

If it's so easily obtained, why would you not post it? Are your fingertips too busy?

Reality says

I was pointing out

Yes, I'm aware of what you were saying. Rather than restating it again, most people would have actually provided the backup data to support their point. The fact that you didn't is quite telling.

Reality says

On top of that, the idea that taxing the top 20% to 1% more would make the economy and society better is simply wrong!

Nope--it's correct. It is easily seen in the decline in money velocity as more and more money is hoarded at the top. Wealth inequality is the biggest problem in the US economy by a wide margin.

Reality says

You can look up the growth of federal government spending during 1948-1973. The annual growth rate was around 6% annual rate (a little more than 4x over 25 years), while the GDP (combining both the real economy and the government waste) only grew at about 2.8% annually. That's why, despite your love for those years that you never lived personally, the cumulative effect of those 25 years was the US government having to default on the obligations of the post-WWII world financial system (Bretton Woods) and the Americans on the verge of facing run-away inflation and stagnation

OK--still waiting for your charts and graphs that strip away the government spending and show the "true" growth so we can compare those numbers. Otherwise my data stands unopposed. And the correlation between high top tax rate and GDP growth remains quite strong.

HappyGilmore says

If it's so easily obtained, why would you not post it? Are your fingertips too busy?

Fine, if you insist, here are the details. Please keep in mind several issues when reading the numbers:

1. GDP statistics are not generated by counting good and services directly, but by cumulative chain growth over the years each year (i.e. growth or negative growth compared to previous year, then compounding over many years), so there can be significantly amplified distortions over long time period.

2. The dollar unit of count changes over time; be very careful when looking up numbers from different sources as they can be using different vintages of the dollar unit. Price inflation is another unreliable animal coming out government statistical bureaus, and the federal government itself has re-caliberated several times in the last couple decades alone how inflation statistics is calculated. So take all "deflators" with a grain of salt.

Here is a link to the federal 1948 spending budget, measured in 2009 dollars:

http://federal-budget.insidegov.com/l/50/1948

As you can see, the total spending was $224B (in 2009 dollars); surplus 88.6B amounting to 4.5% of GDP, so GDP was approximately 1.97T (in 2009 dollars). Total spending not counting Social Security liability accrued or government employee pension liability or asset depreciation was 11.4% of GDP.

Here is a link to the federal spending budget for 1971, once again measured in 2009 dollars:

http://federal-budget.insidegov.com/l/73/1971

As you can see, the total spending was $897B (in 2009 dollars); deficit 98.3B amounting to -2.1% of GDP, GDP approximately 4.78T. Total spending not counting Social Security liability, Medicare/Medicaid liability (new accounting trick introduced in the late 1960's), GSE liability (like Fannie, Freddie, etc.; also taken off the book by Johnson administration), government employee pension liability or asset depreciation was 18.8% of GDP.

On the same page, you can also see the numbers for 1973 in the lower right. but you have to deduce the total GDP yourself instead having it given to you on the page.

As you can see, government waste was growing at double the growth rate of GDP (real economy + government waste); that's before counting the off-book and liability items that are not directly counted in current year spending at that time but accrue as liabilities as a result of new forms of taxation invented during the years in between.

The conclusion: despite much higher top tax bracket nominal tax rate, the actual federal government spending as a percentage of the real economy was much much smaller in the 50's than in the 1970's (and later). Concentration of wealth and power is the result of government spending; comes to think of it, that should be obvious: North Korea and Venezuela have much higher percentage of government intervention in the economy, resulting in much greater wealth polarization between the billionaire leaders (in USD terms despite being in those poor socialist countries) vs. the actually starving-to-death poor.

HappyGilmore says

The conclusion: despite much higher top tax bracket nominal tax rate, the actual federal government spending as a percentage of the real economy was much much smaller in the 50's than in the 1970's (and later). Concentration of wealth and power is the result of government spending; comes to think of it, that should be obvious: North Korea and Venezuela have much greater government intervention in the economy, resulting in much greater wealth polarization between the billionaire leaders (in USD terms despite being in those poor socialist countries) vs. the actually starving-to-death poor.

Poor conclusion. Governmental waste is higher now than in either 1950 or 1970 and GDP is much lower. This is because of wealth inequality.

Bottom line: High top tax rate had an effect on inequality which can lead to better economic performance.