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Comment by CryptoPunk | Hacker News Reader

>>I think the fact that steadily increasing tax rates over the decades before 1974 also coincided with high economic growth is a good point against libertarianism.

I think one could reasonably attribute the growth for the first decade or two after tax rates began increasing to the momentum built up during the previously laissez faire era.

Supply chains, investor sentiment, etc all take time to change so a tax hike might not make its effect on GDP immediately evident.

Also, many investments have a time delayed effect on GDP, like large capital projects which can take a decade to complete. Investments in the lower tax era could have only begun outputting goods well into the new high tax era, giving the false impression that the high tax era was responsible. Think a factory that takes a decade to come online for example.

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>I think one could reasonably attribute the growth for the first decade or two after tax rates began increasing to the momentum built up during the previously laissez faire era.

It's a bit much to expect growth to peak during the era 20-40 years after laissez faire ended, and think that it was because of the previous laissez faire policies.

>Supply chains, investor sentiment, etc all take time to change so a tax hike might not make its effect on GDP immediately evident.

These things did not use to be so sophisticated a century ago.

Without a doubt at least, high taxes and health and wealth clearly coexist in many countries. In fact, outside of some tiny countries and also some countries with oil wealth, it's the only form in which wealthy countries exist in this world.

And at the state level in America, this pattern is even clearer. https://en.wikipedia.org/wiki/List_of_U.S._states_by_income

Except for Alaska (small population, vast natural resources), every state in the top 12 by income is liberal-leaning in its voting patterns.

Likewise, except for New Mexico, every state in the bottom 16 by income is conservative-leaning in its voting patterns.

>>It's a bit much to expect growth to peak during the era 20-40 years after laissez faire ended

We need to look at Sweden's peak growth relative to other countries in my opinion, because its absolute growth rate was mediated by more than its own policies.

For example the entire developed world saw its peak economic growth rates during the postwar era, suggesting there were certain global economic conditions created by the establishment of the post-war order that could have played a major role in their economic performance.

So a better indicator of policy effectiveness would be to look at its economic growth relative to its contemporaries.

IIRC, Sweden's economic performance relative to its contemporaries, like the US, began to lag soon after it increased its tax rates to above theirs.

>>Without a doubt at least, high taxes and health and wealth clearly coexist in many countries.

But that's not in dispute. The dispute is over whether those countries are rich because of their current high tax policies, or their past low tax ones.

The article tries to demonstrate that in the case of Sweden at least, it acquired most of its wealth during the past eras.

Those are some good & reasonable points, thank you for making them :).

It would even be quite interesting if potentially the best approach to a healthy & wealthy society would be to be very libertarian for a while, and then very high tax after that...

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