[nickff]

I was not talking about the disincentive effects of taxing income, (though I do believe they exist,) my reasoning was simpler, in that the rich cannot invest the money that the government took away from them.

This is why I made the comparison between what happens with the money if you have a progressive tax vs. flat tax.

[bencpeters]

But you're assuming here that "the rich" investing money is creating more growth (and you stated earlier, helping poor people more) than the government would.

I think that's a difficult statement to back up in the best of times, although it's certainly a difficult thing to prove either way (moving this question beyond the level of anecdotes is really hard). However, when we've got a persistent demand shortage like we have right now, it's much less of a tricky question because of the multiplier effects of consumer spending.