Well I have not seen this mentioned so far; but since mostly geeks post on /. I am not really surprised.
For you guys that cut class the day they taught ECON 101 here is the Cliff's Notes version. As with most things wiki is your friend as a starting place.
Hauser says as marginal tax rates increase the wealthy reduce, hide, under report defer, or otherwise decrease reported income. He notes that under Ike the marginal tax rate was 91%, but over the years it was reduced to 28% under the current prez. But tax revenue over the period from Ike to W has remained constant at about 19.5% of GDP.
The point is high marginal tax rates may seem progressive in theory, but in reality low marginal tax rates have produced more progressive tax collections. Here is the blurb from wiki
The Tax Foundation has made the claim that the tax cuts signed by U.S. Presidents Ronald Reagan and George W. Bush, contrary to popular belief, actually made the U.S. tax code more progressive, not less. They state that in 1980, before Reagan's tax cuts, the richest 1% paid 19.05% of all federal income taxes, and by 1988, after Reagan's tax cuts, their share had increased to 27.58%. Likewise, in 2001, before Bush's tax cuts, the richest 1% paid 33.89% of all federal income taxes, and by 2006, after Bush's tax cuts, their share had increased to 39.89%. [17] However, several issues arise from their arguments. Tax cuts on the top 1% are by definition regressive changes. And citing the results from years after the tax code changes were enacted discounts the changes in incomes. For example, someone earning a higher income but paying a lower tax rate still might pay higher taxes than they did before the tax code was changed.
This is just what you would expect from Hauser's Law.
But there is more. Problems with progressive/regressive tax collections may be an interesting side argument; but we are suppose to be talking about the economy. There does seem to be agreement that high marginal tax rates have a negative impact on the economy in general. When rich guys defer income by reducing business activity not only do they pay less taxes; jobs are lost.
So the question is what is the right marginal tax rate? You don't want it too high (the 91%under Ike was probably too high) or the economy will suffer; but you also dont want it too low or tax revenue will drop (but we dont seem to have a good feel for what the lowest marginal tax should be).
As wiki says until Hauser's Law is reconciled with other economic data making progress in setting optimal marginal tax rates will not be an easy job.