What We Learned About 70% Tax Rates 50 Years Ago

Published: May 16, 2019

Milton Friedman explains what happened when federal tax rates actually reached seventy percent over fifty years ago. As tax rates go up, taxpayers have more of a reason to avoid paying those taxes. Loopholes go hand-in-hand with higher tax rates, which is why lower rates on a broader base of income leads to a more equitable system.

Discussion Questions

1. What are the advantages of flat tax rate?
2. How can a flat tax rate system improve the economy?

Additional Resources

• Watch as Milton Friedman makes a case for the flat tax in “Firing Line with William F. Buckley Jr.: The Economic Crisis. Available here.
• In “Capitalism and Freedom,” Milton Friedman provides the definitive statement of his immensely influential economic philosophy—one in which competitive capitalism serves as both a device for achieving economic freedom and a necessary condition for political freedom. Available here.
• In “A View from the Hoover Archives: Milton Friedman on a Guaranteed Annual Income”, Jennifer Burns taps into the Hoover Library & Archives’ extensive Milton Friedman collection and brings the Nobel Prize-winning Hoover fellow’s work to bear on current policy debates about a universal basic income. Available here.