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Insanity on the Left: Tax Rates and Revenues

July 12, 2012

We’ve all heard the liberal mantra. Why not raise taxes on the rich? Even with all evidence pointed against them, democrats continue to spout nonsense when it comes to this stuff. Apparently, no, it doesn’t matter that just about every government project has been grossly over budget. And no, there’s nothing wrong with government spending nearly doubling over the past decade, skyrocketing by nearly two trillion dollars (source). Let’s just stick our head in the sand and raise taxes, right?

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To anyone still giving any credence to such a preposterous idea, one look at the chart above should provide a damning indictment. We’ve tried higher marginal rates before. We’ve had those in the top income bracket paying upwards of 90% at one point or another. And yet, no matter what the tax brackets have been, the revenue collected by the federal government has consistently hovered around 18% of GDP. Contrary to popular belief, elevated tax rates don’t shoot up tax revenues. They might do so in the very short term, but as people adjust their behavior accordingly, revenues fall back to the 18% level.

So why the push to raise taxes on the rich? Our economy desperately needs the savings that rich people are able to provide. We need the investment, the capital, and the subsequent production. The panacea to an economy madly obsessed with spending isn’t to take away the last of it’s savings. We should be encouraging saving, not taxing it. If we truly want our economy to flourish, we need entrepreneurs who have substantial capital to take their ideas off the ground. Not to mention the moral implications involved in stealing money from peaceful individuals who’ve done nothing but benefit society.

This is nothing less than insanity from the left. We’ve already tied higher tax rates. They don’t lead to higher revenue and they squander prospects for innovation in the private sector.

On the other hand, there’s a criminal organization known as the government. One that only survives under the guise of benevolence. That’s accountable to virtually no one, and that thrives in a thicket of waste and fraud. From the ruined healthcare system to the disastrous housing bubble to the millions murdered overseas, you can see it’s destructive hand. And we’re supposed to willfully increase taxes and grant it more power? Looks like the lefties need to question Obama’s divine words words every now and then.

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