If you want to put a policymaker on the spot, ask them what the top rate of income tax should be. The question befuddles everyone. Last month, Donald Trump broke with decades of Republican convention when he reportedly urged Mike Johnson, the speaker of the House of Representatives, to increase America’s highest federal levy on incomes from 37 per cent to 39.6 per cent, where it stood before the president’s own reforms in 2017. Trump then took to social media to announce that although he would “graciously accept” such a change “in order to help the lower and middle income workers”, Republicans in Congress “should probably not do it”. He is nevertheless “OK if they do”.

This is usually the point at which to compare Trump’s haphazard argument with the staid advice of economists. But they seem just as confused as the president. Their research on the best level for the top rate of income tax can include statements such as: “alternative parameter values give a range of -26 per cent to 50 per cent” (you read that right: a negative tax for top earners may be best). Other economists recommend rates as high as 70 per cent or more, once taxes at all levels of government and income are included.

The Economist