Soak The Rich? Just Remember This Lesson…
…whatever you tax, you will get less of. Whatever you subsidize, you will get more of.
And we don’t have to look very far to find examples. There’s one right across the pond…
In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.
This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.
The figures have been seized upon by the Conservatives to claim that increasing the highest rate of tax actually led to a loss in revenues for the Government.
It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.
George Osborne, the Chancellor, announced in the Budget earlier this year that the 50p top rate will be reduced to 45p from next April.
Since the announcement, the number of people declaring annual incomes of more than £1 million has risen to 10,000.
However, the number of million-pound earners is still far below the level recorded even at the height of the recession and financial crisis.
Last night, Harriet Baldwin, the Conservative MP who uncovered the latest figures, said: “Labour’s ideological tax hike led to a tax cull of millionaires.
Far from raising funds, it actually cost the UK £7 billion in lost tax revenue.
Let’s remember that the national tax rate in Great Britain is the income tax rate. They don’t have state and local income taxes there, like they do in a lot of places in America. Which means that the top income tax rates in the UK are basically what they are in states like New York and California – and perhaps not even as high.
And when the Brits – or at least the soon-to-be-annihilated Labour Party – decided to soak the rich, they found out that people of means can live anywhere they want. And that soaking the rich is actually counterproductive to raising revenue.
Which is a lesson that crosses all national and state borders – just like rich people do when they’ve become fed up at the taxes the Left dreams up to punish them for being rich.
But in the UK, just as everywhere else, the Left doesn’t care. They’re more interested in punishing the rich than they are maximizing revenue. And they’ll resort to every lie in the book, every bit of demagoguery they can, in pursuit of higher taxes on the wealthy. Regardless of who it hurts.
Go after the wealthy with higher tax rates? Watch many of them retire and stop earning such high salaries. Or move their businesses offshore. Or seek shelters which minimize their taxes but don’t maximize economic value (otherwise known as creating less wealth and less opportunity for others).
A rich guy who buys a yacht is by his nature a jerk, right? We should go after his money so he can’t buy that yacht – because we have a deficit and we have mouths to feed, right?
Except that yacht was built by tradesmen with toolbelts around their waists. It was made with materials somebody had to mine out of the ground or chop down out of a forest. It was sold by a guy who works on commission and might go weeks without making a sale and getting money come in.
Lots of people’s livelihoods depend on the rich guy we hate buying that yacht. But the Left doesn’t care about those people, do they?
One of the great failings of the Republican Party – and the Romney campaign in particular, especially given his status as the kind of rich guy the Left can’t stop demonizing – is the failure to attack this “soak the rich” crap head-on with everything they have. The GOP tries to dance around the fact that rich people will benefit from lower tax rates by trying to focus on small businesses and how they’ll be hurt, but that’s stupid. It concedes a premise which is demonstrably false.
The fact is, as the example above demonstrates, raising taxes on rich people means there will be less rich people in America. It means there will be less opportunity for regular folks to do jobs that service rich people – and while au pairs and hunky pool boys might immediately come to mind, what that really means is car salesmen, security system installers, landscape architects, custom electronics technicians, off-duty cops and development officers at the local charity will have less opportunity to earn a living.
Less rich people means more poor people.
Which, of course, is what the Left wants. Because poor people are more amenable to a leftist message. Rich people – and particularly rich people who have actually earned their wealth – are not so amenable.