Think Taxing The Rich Would Fix Things?
Of course anyone with even basic understanding of economics should understand that raising taxes on those that do much of the nations investing will have an adverse effect on the economy and result in the loss of jobs. Really that is besides the point, people react to changes in their environment, including the tax environment. Raise taxes too high and people will change their behavior and tax revenues won’t increase uniformly.
Indeed, ANY time that taxes are increased, the resulting revenues are less than you would expect. In other words, if you raise taxes by 5% you will never get a 5% increase in revenues. If you go too high, you will actually start collecting less money.
To get to my point, we have a HUGE budget deficit adding more than a trillion dollars (a thousand billion or a million million) to the debt every year off into the foreseeable future, unless spending is severely reduced. Lets say we raised taxes enough to cover that debt on just the top 10% of wage earners, how much would we need to collect from each?
Some fairly simple math can give you the answer. There are 13,900,000 workers in the top 10% and 1,300,000,000,000 (1.3 trillion) dollars to be made up. That works out to a round $93,525.18 in new taxes for each.
Does anyone really believe that 1.3 trillion dollars can be taxed away and better the economy? A reasonable person would say that’s a bad idea, and I’m not even entirely convinced taxes could be increased enough to get that return without people changing their behavior and screwing the whole idea up.
The federal budget has increased by 900 billion dollars since 2008, when we had a 400 billion deficit, clearly there are budgets to be cut, and I just want to point out that that increase has nothing to do with the Pentagon.