Tax the rich — 250 %

[Note — This one may be a bit too clever.  I was trying to find a way to expose the “tax the rich” mentality of the left, showing how it is an exercise in futility.   It was written during the latter half of  March.   But, here it is. — asmwizard]

(As published in the Leavenworth Times, April 2011)

The reports of John Kerr moving his yacht from state to state to avoid paying about a half million dollars in sales and excise taxes to his own state of Massachusetts were rampant last summer. I imagine it still rides safely at anchor in Rhode Island. Now, Senator Claire McCaskill of Missouri has a big problem with her airplane: St. Louis County, Missouri wants $300,000 in back property taxes. Kerr and McCaskill should pony up – after all, they’re rich, and their greatest guiding principle as Liberals is “tax the rich.” But, being human, they try to avoid paying taxes themselves.

According to http://welkerswikinomics.com/blog, in 2008 those in the top 5% of income paid about 39% of all taxes, and presumably will as well in 2011, when the amount of personal federal income tax revenue is expected to be 1.1 trillion dollars. If I apply (pardon the expression) mathematics to that, I come up with 429 billion dollars. So, that’s their share now. But, we’re going to run up an estimated 1.27 trillion dollar deficit. That’s just one of many estimates of our 2011 deficit, but all authoritative estimates are rather large. Let’s assume it’s correct.

I just had a happy, Liberal thought: we can eliminate the deficit by raising our tax revenue, and if we tax each of the rich 250% instead of the roughly 35% they pay now, we can actually cover it and build up a pretty good surplus. We Democrats won’t even have to hurt the majority of voters, the lower 95% – the upper 5% don’t have enough votes to hurt us.

In other words, tax them at two and a half times their income, and we’ve got it made. They can afford it. They’re rich, aren’t they? So what if they have to sell things or draw down their savings to cover their tax bills.

But, there might be unintended consequences of such a tax. Tax avoidance behavior might kick in. The tax code allows all sorts of loopholes, and the rich know them all, or they can hire lawyers who do. They might arrange things so they don’t have any income whatever, while still collecting their money. They might move their company overseas, or move their residences to Costa Rica or some such place. We might raise their taxes and yet actually lose revenue.

If they move their company or themselves, they might take jobs with them as well.

Dang it. We banned racial discrimination, so maybe we can make tax avoidance behavior illegal, or at least politically incorrect. Perhaps we can get Kerry and McCaskill to vote for that.  It’s right up their ideological alley.

 

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