So it only missed its target by 50%. Not bad for government work.
The same thing happened in Illinois and New York when they raised taxes on the supposed rich. The result was less revenue than they expected. And in the case of New York, the flight of thousands of millionaires to friendlier climes.
Here’s a little economic reality based on Obama’s announced objectives of increasing tax on dividends and eliminating Mortgage interest deductions:
Paying off your mortgage becomes the best return on investment.
Savings and spending will decline.
Folks won’t save, because of higher taxes on dividends, AND the lack of mortgage interest write off.
With that money allocated to the mortgage, it’s not available for other spending.
It is the definition of STAGNATION, and an inward spiraling economy.
Socialists aren’t interested in facts, but laughing at them sure is fun.
I think the best way to describe the Laffer Curve is that the foot is at rest on the ground, then when the government raises taxes beyond a certain point, the foot rapidly rises in a powerful ascending arc, to contact the government in the groin. Painfully.
1. Tax collected stays constant at 20% of GDP.*
2. Improve the economy will improve the GDP.
3. 20% of ImprovedGDP > 20% of CurrentGDP.
4. Lowering taxes improves GDP.
Conclusion: We are on the dark side of the Laffer curve at Tax = 20% GDP. To increase tax revenue collected, keep cutting until tax collected is less than 20%.
(*I got this 20% GDP factoid from a speech Bernanke gave on increasing taxes. He had some graphs to prove his point. He actually used it to try to justify a value added tax. Bizarre.)
What “progressives” don’t realize is that many are not going to participate in their scheme.
They deny human nature and believe that the producers really will ‘sacrifice’ themselves on the altar of Government. Some of us do not make good slaves.
“It should be known that at the beginning of a dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments.”
‘Abd-ar-Rah.mân Abû Zayd ibn Khaldûn (1332-1406), The Muqaddimah, An Introduction to History, Franz Rosenthal translation, abridged and edited by N.J. Dawood, Bollingen Series, Princeton University Press, 1967, p.230
Bureaucrats think they can raise taxes on the upper income people and they won’t do anything to recover. Well, this shows they are wrong - by a country mile. People tired of losing 60-80 percent of their income will eventually re-examine their lifestyles, look at alternatives, explore ways to collect from the government (like the other leeches do), and basically go semi-Galt.
I did it, and I’m expressly happy about it.