<p>"*n the cases of extreme taxation (Communism is effectively a 100% income tax rate) there is extreme repercussions."</p>
<p>Indeed -- there are extreme repercussions from extreme taxation. But that doesn't mean that there is an impact with small changes in marginal income tax rates. </p>
<p>In the case of the USSR, the tax system was not the only or even necessarily most important difference between it and industrialized democracies. I'm sure you will concede there clearly were many other issues in the USSR, including such major institutional conditions such as centralized planning and partyocracy.</p>