Taxing the rich

Here is another example of something that sounds good on paper but in reality has the opposite effect. From the UK:

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.

This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election….

It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.

George Osborne, the Chancellor, announced in the Budget earlier this year that the 50p top rate will be reduced to 45p from next April.

Money is agnostic. It will always flow to where it can be used the most efficiently. The US wants to raise taxes on monies earned over 250k, which in reality will be enough to fund the US gov’t for a mere 8 days; on paper. The reality that is borne out over and over again is that this money will go elsewhere and this tax increase will result in lower revenues, much like what has happened in the UK. Cutting entitlements and spending must be the course. It isn’t a revenue problem; it’s a spending problem. Taxing the rich is a symbolic gesture and it will be to the gov’ts detriment.


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