The tax debate has reached a comically insane level. The proponents of “soaking the rich” argue that the economy will grow if the government can get its hands on more dollars. The justification soon revolves around tax rates under the Clinton years, the 1950’s and 1960’s, etc.
Needless to say those are flimsy, myopic, and incomplete arguments. Before even wasting time on disproving them, take a step back and look at the bigger picture. We are supposed to be wise enough to resist the idea that putting more of our resources and property in the hands of government will result in a more prosperous outcome. It is antithetical to a free society. It runs contrary to everything we should know about the economy.
The rhetoric about reducing our annual deficits and paying down the debt is pure fantasy. There is no real incentive or reason for our government to operate on a balanced budget while our currency is fiat. In fact, the exact reason why we have fiat currency instead of real money is so that the government can operate on a virtually infinite budget.
Maybe most important to understand is that raising top marginal tax rates will not soak the rich. The Warren Buffett’s of the world are insignificantly affected. Many that would be affected have the resources and lawyers to find ways around paying more, and it’s perfectly legal. Raising rates will impact the middle and upper-middle class. And because the mathematical reality is that raising rates will not increase revenue enough to even slightly put a dent in the deficit and debt, the poor will continue to lose the most because of inflation.