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" ... One reason for the top tax rate is that it does reel in revenue—sometimes. In the 1950s and early 1960s, IRS data was clear that the 91% marginal rate produced essentially no revenue, that about 80% of earners who should have been subject to it by ordinary definitions legally avoided it. Same thing for 70% in the 1970s and 50% in the early 1980s. When Atlas did not simply shrug, lots of income came from/was shifted to unreportable sources (unrealized gains, municipal bonds, etc.) until 1986, when it materialized on the 1040 form in a big way. ... "
" ... So, alongside the demonetisation campaign there is the loophole, that political parties can deposit the old notes in any quantity without, as Jaitley clarified, specific tax investigations. But there will still be the more general checks on where donations came from. This still has a loophole. Simply claim that all deposits were of under RS 20,000 and that the amounts being deposited are simply the aggregate of such unreportable donations. Which is in fact what one party is stating, that 100% of its donations are not so reportable. ... "