April 26, 2014 11:32AM 

# Supply-Side Economics from the Founder of the Brookings Institution 

By [Alan Reynolds](https://www.cato.org/people/alan-reynolds) 

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“Within limits, the system of progressive taxation is defensible and effective. Beyond a certain point, however, it dulls incentives, and may destroy the principal source of funds for new enterprises involving exceptional risks.”

–Harold G. Moulton (founder of the Brookings Instituion), *Controlling Factors in Economic Development*, The Brookings Institution, 1949, p. 292.

##### Related Tags 

[Tax and Budget Policy](https://www.cato.org/tax-budget-policy) 

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