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.
