Raising the top federal marginal tax on earned personal income to 70% (and holding the rest of the current tax code, including the top bracket definition, fixed) would raise substantially more revenue (federal and state, combined) without lowering economic activity.
Responses
© 2025. Kent A. Clark Center for Global Markets.
9%
5%
7%
42%
19%
16%
2%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
11%
52%
17%
17%
4%
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
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 Daron Acemoglu |
MIT | Bio/Vote History | ||
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It will increase substantial revenue. Impact on economic activity is somewhat uncertain, but probably not huge, except through tax avoidance
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 Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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Some increase in revenue but substantial tax avoidance. Modest drop in output due to lab. supply response and tax avoidance.
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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Not my area, but no clear evidence that historically high U.S. marginal tax rates reduced economic activity -- though they raised revenue.
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 Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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 Abhijit Banerjee |
MIT | Bio/Vote History | ||
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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 Raj Chetty |
Harvard | Bio/Vote History | ||
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 Judith Chevalier |
Yale | Bio/Vote History | ||
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If Rawls rev max optimal tax is ~70%, that derives from a model in which there is SOME elasticity of economic activity to the tax rate.
-see background information here |
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 David Cutler |
Harvard | Bio/Vote History | ||
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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More revenue: yes. But there would be at least a small decline in activity from the reduced after-tax incentives.
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 Aaron Edlin |
Berkeley | Bio/Vote History | ||
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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I imagine a modest negative impact on activity, given that this would be on top of S&L taxes. But Diamond-Saez & Jones studies disagree...
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 Liran Einav |
Stanford | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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The MPC out of after tax income is not likely to be exactly zero for people in the top bracket.
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 Amy Finkelstein |
MIT | Bio/Vote History | ||
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 Pinelopi Goldberg |
Yale | Did Not Answer | Bio/Vote History | |
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 Austan Goolsbee |
Chicago | Bio/Vote History | ||
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Revenue, yes, but with lots of DWL
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 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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 Robert Hall |
Stanford | Bio/Vote History | ||
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I think it would raise more revenue but would reduce output
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 Oliver Hart |
Harvard | Bio/Vote History | ||
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Revenue would rise, but whether by a lot is unclear because there are many tax loop-holes. I would expect some small disincentive effects.
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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 Caroline Hoxby |
Stanford | Bio/Vote History | ||
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While the evidence from ERTA(1981) & TRA(1986) is not definitive, it--broadly speaking--suggests the opposite: i.e. tax revenue would fall.
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 Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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I dont love the wording of this question particularly "without lowering economic activity".
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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Revenue may be higher, but the impact on output would be substantial. E.g., many will convert earned income to perks or capital gains.
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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It will likely raise revenue but also trigger relabeling of income to avoid the tax and reduce some activity. magnitudes hard to tell
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 Pete Klenow |
Stanford | Bio/Vote History | ||
 Jonathan Levin |
Stanford | Did Not Answer | Bio/Vote History | |
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 Eric Maskin |
Harvard | Bio/Vote History | ||
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If the assertion had read "...without lowering economic activity MUCH" I would have agreed. But ZERO decline in activity seems implausible.
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 William Nordhaus |
Yale | Bio/Vote History | ||
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Would induce severe distortions from different tax rates earned v other income, and worse in NY, CA.... Net revenue hard to determine.
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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 Larry Samuelson |
Yale | Bio/Vote History | ||
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Some increase in top rate would raise revenue with minimal effects on economic activity; it's less clear how high one could raise the rate.
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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Nobody proposes such drastic changes with current brackets; it would have serious adverse effects.
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 Carl Shapiro |
Berkeley | Did Not Answer | Bio/Vote History | |
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 Robert Shimer |
University of Chicago | Bio/Vote History | ||
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Total tax rate would exceed 85% in many states. This is surely on the wrong side of the Laffer curve, especially in the long run
-see background information here -see background information here |
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 James Stock |
Harvard | Bio/Vote History | ||
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Why this question? AOC proposed 70% rate on income > $10M. This is a non-starter, and for good reasons like shifting income to cap gains.
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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Not happy with Q. Raising top rate w/o other changes not best approach. Would raise substantial revenue, but some cost in gdp in short run.
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