What Is The Purpose Of Progressive Taxation?

Paul Rosenberg makes the case that its purpose is to incentivize reinvestment of wealth as opposed to consumption (via nc links):

One root cause of this, econoblogger Bruce Webb argues, is that people misunderstand the purpose of progressive taxation, because they misunderstand the motivations of capitalists. Traditional economics "explicitly assumed that the goal of capitalism is accumulation," he wrote, and thus, "taxation on gains from capital serve to displace investment".
However, this "doesn't hold up well against the historical record.... Instead in most of those cultures and most definitely in Georgian and then Victorian England the evidence is strong that capitalists saw investment as the means to different ends, those of consumption and display that in turn would lead to societal status.... Let us put it this way: Scrooge was not then or now considered the hero, and throughout history the miser has been a despised and mocked figure."
Thus if the goal of upper-class investment is ostentatious consumption, then "The goal of progressive taxation... was to penalize consumption and favor re-investment," which is why Reaganomics - repealing progressive taxation - did precisely the opposite: it favored consumption at the expense of reinvestment.  "[A]ll Supply Side did was to lower the cost of consumption in pre-tax dollars, purchases that were inconceivable in the days of 90 and then 70 per cent top rates have become routine in the days of 15 per cent," Webb concludes.  Now, individual capitalists might like this just fine, but it wrecks havoc with the economy as a whole - including the capitalist class, which loses interest in creating new future value, and falls into decline.
That's a connection made by sociology blogger Peter Frase in his post, "The Decay of the Capitalist Class", which related Webb's argument to observations by economist Doug Henwood, publisher of the Left Business Observer. "[O]ne of the problems of the United States is that there is a great deal of incoherence at the upper level, that unlike the WASP ruling class, there is no social formation that can think in the truly long-term, that can think beyond the short-term concerns about the accumulation of money."
This is a rather precise replay of what happened in the run-up to the Great Depression, a period of time in which top tax rates were similarly slashed, while lavish spending and reckless speculation were the order of the day. Among other things, Roosevelt raised top rates to 90 per cent. It certainly pinched individual capitalists, but business a whole did just fine, and so did the American people as a whole, who experienced four decades of strong, broadly shared growth in prosperity - a glorious past that most Americans outside of Washington yearn to see come once again.

This is an explanation which could plausibly change peoples' outlook on taxation and tax rates.  There should be a lot of numbers which could lend credence to the case, such as R & D research investment by corporations, dividends paid, real estate prices in Manhattan and the Hamptons, yacht sales, etc.  I would like to see a more thorough case put together in this line of argument, and see how well it holds up.  I think there are some real similarities between the Roaring Twenties and the last thirty years, I'd like to see someone pull the threads of excessive debt, excessive consumption and large tax cuts together, and put together a thorough case against said tax cuts.