Reply #2: One thing I like to point out

[angryfirelord]

is that Germany has higher marginal tax rates (45% vs. 35%) and more kinds of taxes (such as a carbon tax, a VAT, and a trade tax), yet they still manage to remain 3rd in GDP numbers. In the booming 1950s, we had a 91% marginal tax rate and from 1964 to 1981, we had roughly a 70% marginal tax rate. So the notion that cutting tax rates is good for everybody isn't true.

Another way to see if high tax rates are good or bad is to look at per capita GDP, which tries to measure the average standard of living. If the supply siders are right, then a higher tax rate should starve government revenues and put a bigger burden on businesses, which mean reducing the standard of living. Yet this isn't true.

http://yglesias.thinkprogress.org/archives/2009/02/if_high_taxes_led_to_growth_the_most_taxed_countries_on_earth_would_be_the_richest_which_they_are.php

For the record, however, the most-taxed countries on Earth (i.e., the countries where revenue is the highest percent of GDP) are in order:

1.Denmark
2.Sweden
3.Belgium
4.France
5.Norway

In terms of per capita GDP these are, respectively, the 4th, 9th, 14th, 15th, and 3rd richest countries on earth while the United States is 17th. Of course in part that’s an exchange rate phenomenon and if you use PPP adjustments rather than market exchange rates, the U.S. looks better. On the other hand, if you peer into the future it seems to me that exchange rate comparisons are likely to make us look even worse in years to come. The high-tax five also do very well on things like the U.N. Human Development index.

In a follow-up to the HDI:

http://en.wikipedia.org/wiki/List_of_countries_by_Human_Development_Index

Again, the US sits at #13, although the gap between numbers is a lot less. Still, it proves that you can have more "socialist" programs and a higher level of taxation and govt. spending without having it impact businesses significantly.