It doesn’t do a lot else though. Over time the revenue increase on hiking taxes is pretty much a wash with the downward pressure on revenue caused by the drag taxation causes on the economy. Here is a demonstration in handy chart form:
The last two decades are particularly notable, the evil Bush tax cuts for the wealthy barely shifted the bottom line. So, all these people who are whining about people making $250K can afford these frakking tax increases, you may be right, but you aren’t going to do a damn thing about the deficit with them.
Government revenue is a function of economic growth, and that factor overwhelms any fiddling you do on tax rates. Our complicated tax code is an exercise in social policy, not fiscal policy. It is a means for the State to engage in social engineering by rewarding some activity and punishing other activity. It only affects revenue in the long term by how it affects economic growth.
And you really want to put downward pressure on this economy because you think people above a certain income level can afford to feel more pain?
1 Comment
Bill Siravo · December 22, 2010 at 4:49 am
Both parties play the class warfare game. I applaud anyone who can make millions legally. I hope someday I can figure out a way to make millions. Nobody has ever been employed by a poor person.
I feel sorry for the downtrodden, but My family and I come first. Would any one in their right mind give money to a neighbor, and then tell their family “We are broke. I gave our money to the neighbor who needs it more than us.” Most of our problems are caused by government. You are right about the social policy. The problem isn’t not enough taxes. It is too much spending.
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