Posted on 08/10/2011 12:24:51 PM PDT by SeekAndFind
Walter Williams‘ latest column probes the historical record of recent government attempts to “tax the rich.” Specifically, Williams looks at the impact of an attempt in 1990 to impose a 10 percent luxury tax on yachts, private airplanes, and the most expensive cars.
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Back then, Congress told us that the luxury tax on boats, aircraft and jewelry would raise $31 million in revenue a year. Instead, the tax destroyed 330 jobs in jewelry manufacturing and 1,470 in the aircraft industry, in addition to the thousands destroyed in the yacht industry.
Those job losses cost the government a total of $24.2 million in unemployment benefits and lost income tax revenues. The net effect of the luxury tax was a loss of $7.6 million in fiscal 1991, which means Congress’ projection was off by $38.6 million.
The Joint Economic Committee concluded that the value of jobs lost in just the first six months of the luxury tax was $159.6 million.
Congress repealed the luxury tax in 1993 after realizing it was a job killer and raised little net revenue. Why did congressional dreams of greater revenues turn into a nightmare?
Kennedy, Mitchell and their congressional colleagues simply assumed that the rich would act the same after the imposition of the luxury tax as they did before and that the only difference would be more money in the government’s coffers.
Like most politicians then and now, they had what economists call a zero-elasticity vision of the world, a fancy way of saying they believed that people do not respond to price changes. People always respond to price changes. The only debatable issue is how much and over what period.
Here’s my question for you: Is it likely that in the two decades since 1990, American human nature has changed? If Congress imposes a luxury tax on corporate jets and other luxury items, will Americans behave differently this time?
I remember the luxury tax well as my husband and I were raising fox for fur at the time. Between the luxury tax and the crazy anti-fur people, we just said it wasn’t worth it anymore so we got out of the business!
Duh, of course, because now we have The Wonderful President Obama, who has limitless faith in the capacity of the American people to pay taxes. He is absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when the rise of the oceans began to slow and our planet began to heal, and Americans kept on buying corporate jets and stuff, no matter how much tax was piled on top of it.
In the latter, none other than Patches Kennedy pleads for a tax INCENTIVE so the rich would buy yachts again. An astonishing fact from that thread is that the construction of one yacht keeps the breadwinner of ONE THOUSAND families on the job.
Costa Mesa Ca went from 130 boat builders and their suppliers to 5 boat builders today.
This is an example of why I now believe that liberals/leftists are actually a genetic subspecies of homo sapiens. They seem to have the ability to hold two diametrically opposed ideas on their heads, while maintaining both are true. Their views on taxes is an example: On the one hand, they contend that taxes can be used to change behavior. Tax a "bad" product or activity and people will buy or do less of what it is they dislike. At the same time, they believe that taxes on income will not effect what the income earners do in order to minimize their tax burden, to the point of deciding to work those extra hours isn't worth it.
So leftists believe that increasing taxes WILL effect people's actions, while at the same time believing that increasing taxes WILL NOT effect people's actions.
I remember a similar case where the state of IL decided to increase the taxes on casinos, where they were already using a "progressive tax." At least one casino ran the numbers, and realized that the costs of running the casino 24 hours a day and the additional taxes would actually cost the casino money, so they decided to operate fewer hours each day, having to lay off a number of workers. So although the state did collect a bit more in taxes, the costs were such that the state actually lost money.
Mark
Whenever you see an apparent contradiction in beliefs or behaviors on the left, just back up another notch and find the consistency. What do both of these positions advance, what do they have in common?
I’ve found that the left is entirely consistent when it comes to advancing communism, destroying capitalism, or increasing control over the people.
I seem to recall something similar in the mid-80’s. The “Luxury tax” was imposed on boats with a value over $100,000. Then there was a big push for licensing boaters, followed by the colored “marine fuel”, and finally the states coming in and jacking up taxes and fees on boats.
“...On the one hand, they contend that taxes can be used to change behavior. Tax a “bad” product or activity and people will buy or do less of what it is they dislike...”
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Do you really think:
-taxes on alcohol are designed to make people buy less alcohol?
-taxes on gasoline are designed to make people buy less gasoline?
-taxes on tobacco are designed to make people buy less tobacco?
-the British tax on tea was designed to make the colonists buy less tea?
Taxes are designed to raise the greatest amount of revenue, period.
If taxes on sales of drugs are intended to raise the maximum amount of revenue, why do they lock up drug dealers?
Would the governments not collect more taxes if they apprehended the dealers, collected the taxes, then let them go back to their businesses?
Do what?
Huh?
Can you read?
I have learned I can not help you by typing slower. If you can not understand what I wrote, seek help from your local school system.
“...taxes on sales of drugs...”
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What taxes would those be?
I could go on, but, not knowing your drug of choice, I would not be able to determine when I had satisfactorily answered your stupid question.
Thanks, I never heard of that before.
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