A Tragic Irony: Tax The Rich, Hurt The Poor

IBD ^ | May 16, 2011 | by Thomas Sowell

[library user]

~ EXCERPT ~

We could definitely use another Abraham Lincoln to emancipate us all from being slaves to words.

In the midst of a historic financial crisis of unprecedented government spending, and a national debt that outstrips even the debt accumulated by the reckless government spending of the previous administration, we are still enthralled by words and ignoring realities.

President Barack Obama's constant talk about "millionaires and billionaires" needing to pay higher taxes would be a bad joke if the consequences were not so serious. Even if the income tax rate were raised to 100% on millionaires and billionaires, it would still not cover the trillions of dollars the government is spending.

More fundamentally, tax rates — whatever they are — are just words on paper. Only the hard cash that comes in can cover government spending. History has shown repeatedly, under administrations of both political parties, that there is no automatic correlation between tax rates and tax revenues.

When the tax rate on the highest incomes was 73% in 1921, that brought in less tax revenue than after the tax rate was cut to 24% in 1925. Why? Because high tax rates that people don't actually pay do not bring in as much hard cash as lower tax rates that they do pay. That's not rocket science.

[TheOldLady]

I just wish we could gather all the leftists together, open their heads up, and pour Thomas Sowell’s wisdom into them.

If only we could.

[Lysandru]

Aside from the whole statist anti-federalism asshat business, he was a great guy

I guess that you are no longer "Still Thinking." Do you have any evidence to back up your assertion about Abe Lincoln? Or are you just a bitter, whinging Southerner who still won't accept that the American Civil War was primarily about slavery?

Can you please show me anything in Lincoln's 1860 platform that was anti-federalist?

There is no doubt that the American Civil War vastly increased the power of the federal government, but to assert that this was Lincoln's intent is to commit the logical fallacy of "post hoc, ergo propter hoc."