A Lesson That Must Be Repeated Until They Understand

Stuart Schneiderman delves into the issue of taxing the rich and how, in the end, boosting taxes on them rarely delivers the promised revenues.

As he writes:

[T]he rich are not cardboard figures, dramatic personae who roll over whenever they are told to give more to the government.

In other words, the targeted rich will take the appropriate measures to reduce their tax obligations, including finding ways of reducing their income such as deferring any dividends, not selling stocks, or not cashing in bonds. To think they won't react to the government's attempts to take even more of their money is a foolish, if not a deluded belief. The argument often put forward by those who believe the rich don't pay their fair share? “Oh, they can afford to pay a little more.” But in the real world that 'little more' adds up until it is a lot more. We've already reached that point, but the “gimme” crowd doesn't care. They want their “free” stuff and they figure the rich should pay for it all.

We are on the backside of the Laffer Curve, where increased tax rates will not generate the expected revenues. We've seen that again and again the People's Republic of California, where recent tax rate increases collected $800 million less than was projected during the first month they came into effect, leaving an even bigger deficit than if they had done nothing. (While the state did collect a bit more revenue, the increase in state spending outstripped the new revenues because the spending was based upon the projected revenues, not the actual revenues collected.)

It's time that those who are so generous with other people's money realize they can kill the goose that lays the golden eggs, that those being forced to support the every growing number of takers will at some point say “Enough!” and go Galt, leaving the takers with nothing to take.