The always insightful Michael Novak has a great piece over at First Things regarding the wrongheaded anti-capitalistic arguments of the Christian left. It’s also a good primer on supply-side economics. Here are some key paragraphs:

In April 2007, the IRS received more tax dollars than in any month in its prior history. The new tax policies of the last few years are soaking the rich heavier than they have ever been soaked before. The rich are paying a larger percentage of the income tax than ever before (85 percent in 2004, compared to 65 percent in 1979). They are also paying higher amounts of raw dollars each year—but they have not been complaining.

Perhaps you have felt it in your own experience. If offered a thousand dollars for a freelance job, when the federal and state taxes were going to take $550 or more in taxes, it didn’t hurt much not to undertake the travel and the fuss. But when the government takes only $300 and leaves you $700, it feels like an obligation to your family, kids, and grandkids to accept it. Incentives affect decisions.

Since tax rates are lower than before, the rich gladly pay larger amounts of tax dollars at lower rates, than paying fewer dollars at higher rates. They hate the disincentives of the higher rates. The low rates make paying taxes hurt less. Meanwhile, lower tax rates also encourage fresh investment, to create even greater wealth (and later to pay even more dollars in taxes).

This seems to me a win-win-win outcome. The government gets higher and higher revenues; the rich pay higher and higher amounts of tax dollars; and the standards of living of the poor rise more quickly, as their rising percent of all federal spending—two years ago, 34 percent—brings in an ever more plentiful stream of actual dollars.

It seems to me that an economic system that works like this is far better than any prior economic system in history, whether landowning, agricultural, traditional, or early industrial—let alone the Mickey Mouse socialist systems of Eastern Europe and China. Whatever its faults, the American economy has proved itself capable of absorbing about ten million new immigrants every decade, nearly all of them poor, and helping them to rise out of poverty by themselves within ten years.

In fact, close study shows that if any American does the following three things—works even at a minimum wage all year round, stays married (even if not on the first try), and finishes high school—his or her chances of being poor are only 7 percent. He or she has a 93 percent chance of moving out of poverty fairly quickly. The vast majority of individuals at the bottom sure keep doing that, decade by decade. The actual population at the bottom keeps changing and churning.