Thursday, November 29, 2012
Raising tax rates on the rich results in lower tax revenue
by Clifford F. Thies Does raising tax rates on the rich increase or decrease revenue? According to the intellectual elite, rich people are not particularly bright. They work because of a habit or a socially-contracted disease, or maybe because of a genetic predispostion. Therefore, when you raise tax rates on them, they just keep working, like fools, indeed, like the racist, homophobic, throwback Neanderthals that they are. The latest test of this theory that the rich are idiots is from Great Britain. There, the former Labour government raised taxes on people making more than 1 million pounds per year. This was in order to increase revenue and close a rather awful gap between expenditures and revenues. Now the data are in. What happened to revenue? Did the idiots just keep working, no matter that they were taxed at a higher rate? Well, not exactly. The number of million pound taxpayer fell from 16,000 to 6,000. The higher rate on the smaller number of rich people resulted in less revenue. The budget deficit got bigger, not smaller. Check out the following link: London Telegraph "Two-thirds of millionaires left Britain to avoid 50p tax rate" What happened to the rich? Where did they go? Did they emmigrate? Cut back on working? Shift what would have been taxable income into non-taxable perquisites, such as a coporate box at Wembly stadium? Did they just hide their income? And, how did the idiots know to avoid or evade the higher taexas? But, maybe the fall in tax revenue in Great Britain was just a coincidence. Maybe we should conduct another experiment (not that we have any doubt about our theory, err, knowledge of how the world works. How about we raise tax rates on the rich in another place? America, for example.