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If this keeps up, a lot of folks are simply going to leave. As with the parable of the men at the restaurant (copied from another thread):

“Suppose that every day 10 men go to a restaurant for dinner. The bill for all ten comes to $100. If it was paid the way we pay our taxes, the first four men would pay nothing; the fifth would pay $1; the sixth would pay $3; the seventh $7; the eighth $12; the ninth $18. The tenth man (the richest) would pay $59.”

The 10 men ate dinner in the restaurant every day and seemed quite happy with the arrangement until the owner threw them a curve. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily meal by $20.” Now dinner for the 10 only costs $80. The first four are unaffected. They still eat for free. Can you figure out how to divvy up the $20 savings among the remaining six so that everyone gets his fair share? The men realize that $20 divided by 6 is $3.33, but if they subtract that from everybody’s share, then the fifth man and the sixth man would end up being paid to eat their meal.

The restaurant owner suggested that it would be fair to reduce each man’s bill by roughly the same percentage, being sure to give each a break, and he proceeded to work out the amounts each should pay. And so now the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of $59.

Outside the restaurant, the men began to compare their savings. “I only got a dollar out of the $20,” complained the sixth man, pointing to the tenth, “and he got $7!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar, too. It’s unfair that he got seven times more than me!”

“That’s true,” shouted the seventh man. “Why should he get $7 back when I got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor.”

Then, the nine men surrounded the tenth man (the richest one, paying the most) and beat him up. The next night the richest man didn’t show up for dinner, so now the nine men sat down and ate without him. But when it came time to pay the bill, they discovered something important. They were $52 short!

“And that, boys, girls and college instructors, is how America’s tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table any more. There are lots of good restaurants in Switzerland and the Caribbean.”

If the tax system becomes any more punitive, many are simply going to eat at different restaurants, and the burden will suddenly fall on many who never realized how much of a free ride they were getting. That sort of thing won’t end well.

We need to make a whole college course on conservative economics based on stories like this

I have a great example of two men in a closed system that goes like this:

There are two men on an island

One works and gets paid 100 dollars, the other one is unemployed.

The magic government fairies that watch over these two men decide to tax the rich man $20 so that they can give the money to the poor man in ‘unemployment’

So there is still only 100 dolars in this system. The rich man has 80 and the unemployed man has 20.

After a while the poor man says how unfair that he canot live on $20 so they tax the rich man $50 and ‘spread the wealth around’ so now they both have $50.

But the rich man decides not to work anymore, since being unemployed earns him just as much as being employed.

Now there is ZERO in this system because no one is working at all.

Then a smart Sarah Palin Fairy comes along and says “look, we cannot take your money to give to someone for doing nothing” But we will allow a tax deduction for the expense of hiring someone.

So the rich man goes back to work and makes $100. He then HIRES the poor man to build him a boat, and pays him $50.

Now... the Rich man has $50 cash, and he ALSO has a $50 boat, and the poor man has $50 cash. So now there is $150 in this closed system.

An increase of $50 because WORK CREATES WEALTH. Taxation DESTROYS WEALTH

next... the government fairy discovers capital gains taxes (To Be Continued)