From Stossel, John No, They Cant. Kindle Edition. I thought … economist Art Laffer had permanently debunked the tax-the-rich fantasy years ago… he drew a curve on a napkin that charted the way tax revenues stop rising when tax rates get too high: “People don’t work to pay taxes,” he said. “They’ll change where they earn their income, how they earn their income , when they receive the income. They’ll change all of those things to minimize taxes.” We can see that looking at tax receipts over time. Viewing the “Reality Isn’t Negotiable” chart, before 1963, every dollar after $ 400,000 (in today’s dollars) was taxed at more than 90 percent. Revenues the government got from that equaled about 18 percent of gross domestic product. Then the top rate was lowered to 70 percent, then to 50 percent, and then to as low as 30 percent, before it was raised back to 40 percent in the 1990s. Despite those sharp changes, chart below shows… tax revenue seldom exceeded 20 percent or fell below 17 percent of GDP. As Laffer says, people adjust their activities to the tax burden. Worse, higher taxes give rich people and politicians more reasons to collude. The rich make contributions to political campaigns, and politicians pay the rich back by giving them tax loopholes.
Posted on: Sun, 10 Aug 2014 20:34:05 +0000
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