 According to this line of reasoning, if businesses were to suddenly become more profitable and efficient thanks to automation, then that money would flow throughout the businesses, raising everyone's standard of living, increasing everyone's leisure time. But when Reagan dropped that top tax rate down to 28%, everything changed, as you can see in this graph. Now, as businesses became more profitable, there was a far greater incentive for CEOs to pull those profits out of the company and pocket them because they were suddenly paying an incredibly low tax rate.