I am reminded of an old article in Business Insider from 2011 pointing out that at that time we had near the historic lowest high-income tax rate since we had income tax brackets. With the only times it was lower were the times leading up to financial crashes, mid 1920’s, mid 1980’s oh and the early 2000’s but the other times we were smart enough to raise taxes after the crash to attempt to stabilize the budget — even Saint Reagan slightly raised taxes to combat the recession of the mid 1980s, but left it to Bush and Clinton to really fix the problem left by his spend and no-taxes policy.

So, the best long term sustained growth for the US economy with the least problem with the buildup of wealth dynasties described above?

The time that all Republicans claim to love, the 1950’s and early 1960’s marginal tax rates were above 90% for this entire period for the equivalent of billionaires today plus an inheritance taxes of 77% on estates over 10,000,000 with only the first 60,000 exempted. So multi-millionaires were hit hard, but somehow, they continued to exist and the country not only did well but prospered and so did the companies they started.

But the current crop of Republicans would really like to forget that part of the growth equation from the 1950’s — the part where there was an active government that taxed the heck out of the rich and provided little things like low cost health care, education and housing for poor veterans. It wasn’t perfect by any means the veterans that got the benefits were overwhelmingly, Straight White Christian, what the Republicans would like the country to be. But technically if they had actually implemented the laws as written they benefits were supposed to go to anyone who served between 1938 and 1949, later extended to 1956. So there was a surprisingly progressive law that could have extended housing and education benefits to a large number of minority americans in the 1950’s that was undermined by its implementation.

Anyway off topic, the main point is that the correlation between low taxes and a good economy is backwards from that the Republicans preach. Yes there will be a short boom — for a few years the economy burns fast and hot, but then it crashes. This has happened often enough that it is an obvious pattern, it is about ~5 or so years after the big tax cut that it hits, 1926 -> 1929, 1980 -> 1984, 1988-> 1994, 2001 -> 2007. So we are due 2017 to what 2020 or 2022? From the way the indicators are bouncing around and the brewing trade disputes I would guess earlier rather than later this time.