The people arguing that taxes on high earners should not be raised (and should perhaps even be lowered) are mostly not saying "The government's revenues are too high"; they are saying that those tax rates are too high -- that higher upper-band income tax rates are unjust, or will reduce the incentive to work harder, or something of the sort.
It seems perfectly reasonable to me to respond to this by pointing out that upper-band tax rates have been distinctly higher in the past, and that innovation and wealth creation have done just fine when they were.
Incidentally, it seems pretty odd to me to say "more or less flat" and give a number as precise as 18.1% when the actual variations have been from 15% to over 20%. I wouldn't call that "more or less flat" (though I would agree there's no long-term trend, which is an entirely different matter) -- but, regardless of that, I suggest an experiment. Ask someone to plot a graph of something that's "more or less flat at 18.1%", a graph of something that's "more or less flat at 18%", or a graph of something that's "more or less flat, between 15% and 20%". I predict that the first will be much, much flatter than the actual revenue graph; the second will merely be much flatter; and the third might be about right (though probably still too flat; "varying between 15% and 20%" would most likely get you a better result).
In other words, your choice of wording gives a very false impression of how the graph actually behaves.
"It seems perfectly reasonable to me to respond to this by pointing out that upper-band tax rates have been distinctly higher in the past, and that innovation and wealth creation have done just fine when they were."
In the olden days the top tax rates were incredibly high (90%), but you didn't actually pay that; you had a ton of deductions to lower you actual paid rate.
Forgetting that argument for a second, was there an opportunity cost that doesn't exist today? With those periods of innovation and wealth creation, did they only happen because we were the "best" location at the time? As in, it didn't matter what the rates were because the US was the best place given the infrastructure you require. Now you can go to many places on the globe and get the same stuff done. Wouldn't that imply that the US has to become more competitive in order to promote growth, and part of that competitiveness (the variables we can manipulate) would be lowering marginal income taxes.
It seems perfectly reasonable to me to respond to this by pointing out that upper-band tax rates have been distinctly higher in the past, and that innovation and wealth creation have done just fine when they were.
Incidentally, it seems pretty odd to me to say "more or less flat" and give a number as precise as 18.1% when the actual variations have been from 15% to over 20%. I wouldn't call that "more or less flat" (though I would agree there's no long-term trend, which is an entirely different matter) -- but, regardless of that, I suggest an experiment. Ask someone to plot a graph of something that's "more or less flat at 18.1%", a graph of something that's "more or less flat at 18%", or a graph of something that's "more or less flat, between 15% and 20%". I predict that the first will be much, much flatter than the actual revenue graph; the second will merely be much flatter; and the third might be about right (though probably still too flat; "varying between 15% and 20%" would most likely get you a better result).
In other words, your choice of wording gives a very false impression of how the graph actually behaves.