Though it has become politically irrelevant and I am now committed to soaking the rich until California blooms or burns or at least until I have my share of the spoils,* I have been asked why I previously “voted against my job” and opposed tax increases, so I will answer that question as a final nod toward fiscal wisdom and responsibility.
In the simplest terms, tax rates are not directly proportional to tax revenues. Beyond a certain point, higher tax rates will actually result in reduced revenues as the economy declines in response to the rising costs and as overburdened taxpayers find ways to avoid or evade taxes. Of course, the reverse is also true. To an extent, lower tax rates can allow for economic growth that increases tax revenues in the long term.
Stated another way, if the private sector prospers, then the public sector will prosper in turn. If the public sector demands too much from the private sector, and the private sector suffers as a result, then the public sector will also suffer in the end.
I don’t know where we are on the curve, but I’m fairly certain it is somewhere beyond the point of revenue maximization. That was my pragmatic reason for opposing higher taxes.
*Apparently, it’s greed only if you make more than $250,000 per year.
*Apparently, it’s greed only if you make more than $250,000 per year.
The best part is much of this curve (but not all) are proven. History has actual data to show this is not speculation, but observation.
ReplyDeleteI think the best part is Obama has conceded this point, but has openly said it is not about making more revenue for the government; it is about "Fairness." So he is willing to cut off the government's nose to site it's face. All in the spirit of class warfare. I hate to use a buzz word like that, but I can't think of a better way to label it.
Though, like my brother, I would demand a citation for the position you ascribe to President Obama, I am already on record assigning even more cynical motives to both Democratic and Republican policies, so such a demand would merely be for the satisfaction of my own lazy curiosity. Otherwise, I usually satisfy myself with the contention that these people are not nearly as brilliant as the Oprah Winfreys of the world make them out to be.
ReplyDeleteI sent a link to the thread your brother was contributing. I can't remeber how to get there, but I figure you have seen it.
ReplyDelete