Does the stock market and economy contract with the increase of taxes? The chart below should put such thinking to rest.
In the period from 1912 to 1963, the top marginal tax rate increased from 0% to 91%. In the same period of time, the stock market, as represented by the Dow Jones Industrial Average, increased from 88 to 762.
Is the point of this posting that we should increase taxes? No. The point of this posting is to clarify irrational arguments that suggest lowering taxes will cure problems in the economy.