Wednesday, January 7, 2015

On the Theory that Tax Rates (Especially on the Wealthy) Don't Influence Behavior

It's absurd, in my opinion. a) Bjorn Borg, Ingemar Bergman, and scores of other Swedes left their native Sweden in the 1980s when the top tax rate was a crushing 80-something percent. b) Billions and billions of dollars of wealth has left high tax states such as New York, California, New Jersey, and Massachusetts and migrated instead to lower tax states such as Texas, North Carolina, and Florida. And c) whenever the top tax rate has been reduced precipitously (as it was during the Harding, Kennedy, and Reagan Presidencies) on GROSS income, it has invariably led to people earning more GROSS income (and paying more in taxes, too)....................................................................................P.S. And, yes, I've seen it on the other end as well; folks knowing exactly how much money that the can earn and not have it effect their benefits and so they're constantly refusing extra hours. Playing the system is what they call it, I guess.

2 comments:

dmarks said...

Remember the greedy Clinton-era luxury tax?

It was supposedly to soak the rich (who were already paying the lion's share of taxes). But it ended up causing blue collar boat builders to be fired, while rich just found something else to buy that didn't involve the government stealing more from them.

Will "take no prisoners" Hart said...

Yet another example of the law of unintended consequences.