This seems pretty obvious...funny how an attempt to disprove it bolsters the case.
"There is No Economic Reason Not to Raise the Top Rate"
Bruce Bartlett says Allan Meltzer made a pretty good case for raising taxes on the wealthy:: Would a Higher Top Tax Rate Raise Revenues?, by Bruce Bartlett, Commentry, NY Times: On Friday, Prof. Allan Meltzer of Carnegie Mellon University, a well-known conservative economist, offered a commentary in The Wall Street Journal arguing against policies to equalize the distribution of income. His key piece of evidence is ... from a study by the Swedish...
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- This is ignoring something.
Raising taxes decreases the net income of the wealthy. If net worth increases at the same rate regardless then they must have been spending that money with the lower tax rate. The market is a much better investor of money than the government, so letting them contribute directly to the market would be preferred to letting the bozos in washington play politics with the money.
Second, by not letting people experience the rewards of their work (or rewards of their smart investing) we remove incentive to work or invest harder/smarter. In Europe the wealthy don't want a raise so much as they want more vacation time because the government takes so much of their raises. This means Europe encourages their best and brightest to work less rather than being more productive. Not a good idea for society.
I am not saying we shouldn't have fair taxes (tax investments like incoming, etc), but I don't think that very progressive tax rates are a good answer.Mar 14, 2012