Former New Smyrna Beach High School Assistant Principal Ken Phillips doesn't understand the rationale of increasing taxes on the rich to pay for new government programs:”Don’t ask me to explain those people.”
Like many people, Phillips gets the fact that such an action is just plain wrong as well as futile, stupid and anti-productive.
According to extensive and accurate federal Treasury Department records, every time the top tax rates have been dropped, the revenue collected from the top earning Americans has gone up and every time the top tax rates have gone up the revenue collected from the top earners has gone down.
The rich have ways to avoid the higher tax rates. Money will be put in tax free bonds. Money will move overseas and money will “go into hiding “ by various means. The rich have can hire very skilled people to arrange their affairs to reduce and avoid excess taxation.
This phenomenon was first noticed during the presidency of Calvin Coolidge; later seen clearly under the Kennedy and Reagan presidencies.
Furthermore, the revenue collected from capital gains and dividend taxes went up drastically after those rates were dropped under Bush. Not only did Tax revenue go up but business was increased. .
When top marginal tax rates go up, not only does the treasury get less money, but the economy suffers as economic activity slows down. Fewer businesses are expanded or started. And that means fewer jobs are created.
Despite all of this, there are a stubborn few who insist that the present recession is caused by tax cuts for the rich. Actually, the opposite is true. The economy is now suffering partially in anticipation of the expiration of the Bush tax cuts.
Because of the uncertainty over new taxes and new regulations, businessmen, investors and the people who create jobs in the economy have gone into the wait and see mode. It is quite difficult to start a new business if you don’t know what the taxes and regulations are going to be.
In the meantime, they are trying to put their assets in a safe place until the administration’s “war against prosperity and American business” comes to an end.
There is one small bit of poetic justice in this because the people on who’s behalf this mean spirited class warfare is being waged are the ones most likely to be hurt the most by it.
It is a shame that the American public is not more aware of these facts so that when some windbag politician gets up and talks about increasing taxes on the rich or anybody else to pay for his hare brained scheme, he will be laughed or booed off the stage.
Unfortunately such ignorance is usually met with applause instead of the scathing response it deserves.