{"id":22097,"date":"2019-01-17T10:01:08","date_gmt":"2019-01-17T15:01:08","guid":{"rendered":"http:\/\/www.megalextoria.com\/wordpress\/?p=22097"},"modified":"2019-01-17T10:03:31","modified_gmt":"2019-01-17T15:03:31","slug":"why-taxing-the-rich-always-ends-up-landing-on-the-middle-class-instead","status":"publish","type":"post","link":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/2019\/01\/17\/why-taxing-the-rich-always-ends-up-landing-on-the-middle-class-instead\/","title":{"rendered":"Why &#8220;Taxing the Rich&#8221; Always Ends Up Landing on the Middle Class Instead"},"content":{"rendered":"<p><a href=\"https:\/\/supload.com\/S1W9dGCf4\"><img decoding=\"async\" class=\"alignnone size-full\" src=\"https:\/\/i.supload.com\/HyeZ9_f0GN.jpg\" alt=\"\" \/><\/a><\/p>\n<p>As Democrats take control of the US House,\u00a0<a href=\"https:\/\/www.vice.com\/en_us\/article\/4399j9\/aocs-plan-to-tax-the-rich-is-the-opposite-of-radical\" target=\"_blank\" rel=\"noopener noreferrer\">taxing the rich<\/a>\u00a0inevitably becomes a focus. Progressive candidates wasted no time in denouncing the recent round of tax cuts in their campaigns as a giveaway to the rich. Although this rhetoric often\u00a0<a href=\"https:\/\/www.reuters.com\/article\/usa-tax\/three-quarters-of-americans-favor-higher-taxes-for-wealthy-reuters-ipsos-poll-idUSL2N1MM024\" target=\"_blank\" rel=\"noopener noreferrer\">polls well<\/a>\u00a0among some key demographics, in practice, taxation isn\u2019t so simple. A quick history lesson can teach us that targeting the rich can backfire and substantially harm the middle class.<\/p>\n<h2 id=\"link-0\">The Law of Unintended Consequences<\/h2>\n<p>An excellent case study for this can be found in\u00a0<a href=\"http:\/\/www.aei.org\/publication\/the-lesson-of-economic-damage-from-taxing-the-rich-with-the-punitive-luxury-tax-in-the-1990s\/\" target=\"_blank\" rel=\"noopener noreferrer\">the luxury tax from the 1990<\/a>budget deal. The motivation behind the tax was to bilk the rich to reduce the national deficit with targeted taxes. On the surface, this seemed pretty straightforward\u2014tax the excess of the rich to raise money and spare the middle class. In theory, the well-meaning politicians thought that rich people would just simply pay more for their fancy toys.<\/p>\n<p>Unfortunately, the law of unintended consequences is real, for the rich responded by buying less. The most pronounced effects of this luxury tax were felt throughout the American yacht industry. The additional 10 percent tax on yachts caused American boat builders to shutter operations and cut jobs as the rich either skipped out on yachts or bought them cheaper from overseas. The\u00a0<a href=\"https:\/\/townhall.com\/columnists\/walterewilliams\/2011\/08\/10\/ignorance,-stupidity-or-connivance-n869382\" target=\"_blank\" rel=\"noopener noreferrer\">tax did not raise money for public programs<\/a>; instead, it actually created a revenue loss as a result of the associated job loss.<\/p>\n<p><span class=\"rte-quote\">In the 1950s, when top marginal rates were 91 percent, research shows that a majority of the wealthy successfully avoided the tax and that decades of cutting high marginal rates induced growth.<\/span><\/p>\n<p>This particular case isn\u2019t unique. The wealthy aren\u2019t just money bags sitting around waiting to be tapped. In the 1950s, when top marginal rates were 91 percent, research shows that a majority of the wealthy successfully\u00a0<a href=\"https:\/\/taxfoundation.org\/taxes-rich-1950-not-high\/\" target=\"_blank\" rel=\"noopener noreferrer\">avoided the tax<\/a>and that decades of\u00a0<a href=\"https:\/\/academic.oup.com\/qje\/article-abstract\/133\/4\/1803\/4880451?fbclid=IwAR0HXDPKI8chues7mEWybfRkUB-COG5myt4jt2WSqGVEnCJaR4_deV6UK1I\" target=\"_blank\" rel=\"noopener noreferrer\">cutting high marginal rates induced growth<\/a>.<\/p>\n<p>American socialists have sold their faithful adherents on a vision of an altruistic state-led future paid for by the rich. In doing so, they heavily overestimate the ability of the wealthy to shoulder dramatic increases in the tax burden and heavily discount the abilities of the wealthy to\u00a0<a href=\"https:\/\/www.icij.org\/investigations\/panama-papers\/\" target=\"_blank\" rel=\"noopener noreferrer\">avoid such taxes<\/a>.<\/p>\n<h2 id=\"link-1\">Unhinged Dreams of Grandeur<\/h2>\n<p>But even if the rich were dumb enough not to hide their wealth and income through various mixtures of shell corporations, non-profits, and offshore accounts, there\u2019s a simple math problem many forget: the top 1 percent couldn\u2019t possibly fund the utopian visions of the left.<\/p>\n<p><span class=\"rte-quote\">Hidden within these plans for saving the earth is a mandatory scheme to transfer massive amounts of wealth from the American middle class to central planners.<\/span><\/p>\n<p>In reality, the cost to\u00a0<a href=\"http:\/\/www.crfb.org\/papers\/nine-social-security-myths-you-shouldn%E2%80%99t-believe\" target=\"_blank\" rel=\"noopener noreferrer\">save Social Security<\/a>, fund universal\u00a0<a href=\"https:\/\/www.bloomberg.com\/opinion\/articles\/2018-08-27\/medicare-for-all-would-be-costly-for-everyone\" target=\"_blank\" rel=\"noopener noreferrer\">healthcare<\/a>,\u00a0<a href=\"http:\/\/www.crfb.org\/blogs\/can-we-fix-debt-solely-taxing-top-1-percent\" target=\"_blank\" rel=\"noopener noreferrer\">pay down the national debt<\/a>,\u00a0and launch\u00a0<a href=\"http:\/\/web.stanford.edu\/group\/efmh\/jacobson\/Articles\/I\/USStatesWWS.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">a Green New Deal<\/a>\u00a0will be borne by wealthy, middle class, and poor Americans. Hidden within these plans for saving the earth and implementing the massive welfare state is a mandatory scheme to transfer massive amounts of wealth from the American middle class to central planners.<\/p>\n<p>Rampant progressive ideologues desperately want to implement their dreams of redesigning America in the image of the highly romanticized Nordic nations. With unhinged dreams of grandeur, they honestly believe nothing could go wrong, all while building policy oblivious to the law of unintended consequences.<\/p>\n<p>Feel free to dream, but don\u2019t expect the rich to shoulder the entire cost. It doesn\u2019t work that way in Norway, Sweden, or Venezuela. And it won\u2019t work that way in the USA.<\/p>\n<p><a href=\"https:\/\/www.intellectualtakeout.org\/article\/rich-never-actually-paid-70-percent\" target=\"_blank\" rel=\"noopener\"><em>This article was reprinted from Intellectual Takeout.<\/em><\/a><\/p>\n<p class=\"raindrops-press-this\">Source: <em><a href=\"https:\/\/fee.org\/articles\/why-taxing-the-rich-always-ends-up-landing-on-the-middle-class-instead\/\">Why &#8220;Taxing the Rich&#8221; Always Ends Up Landing on the Middle Class Instead &#8211; Foundation for Economic Education<\/a><\/em><\/p>\n<p><center><iframe src = \"https:\/\/megalextoria.neocities.org\/dclick.html\" width=\"560\" height=\"360\"><\/iframe><\/center><\/p>\n","protected":false},"excerpt":{"rendered":"<p>As Democrats take control of the US House,\u00a0taxing the rich\u00a0inevitably becomes a focus. Progressive candidates wasted no time in denouncing the recent round of tax cuts in their campaigns as a giveaway to the rich. Although this rhetoric often\u00a0polls well\u00a0among some key demographics, in practice, taxation isn\u2019t so simple. A quick history lesson can teach us that targeting the rich can backfire and substantially harm the middle class. The Law of Unintended Consequences An excellent case study for this can be found in\u00a0the luxury tax from the 1990budget deal. The motivation behind the tax was to bilk the rich to reduce the national deficit with targeted taxes. On the surface, this seemed pretty straightforward\u2014tax the excess of the rich to raise money and spare the middle class. In theory, the well-meaning politicians thought that rich people would just simply pay more for their fancy toys. Unfortunately, the law of unintended consequences is real, for the rich responded by buying less. The most pronounced effects of this luxury tax were felt throughout the American yacht industry. The additional 10 percent tax on yachts caused American boat builders to shutter operations and cut jobs as the rich either skipped out on yachts [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[622,1701],"class_list":["post-22097","post","type-post","status-publish","format-standard","hentry","category-news-and-politics","tag-economics","tag-taxes"],"_links":{"self":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/posts\/22097","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/comments?post=22097"}],"version-history":[{"count":0,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/posts\/22097\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/media?parent=22097"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/categories?post=22097"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/tags?post=22097"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}