posted on Mar, 17 2011 @ 10:45 AM
reply to post by ldyserenity
How about this? Say you could prove with absolute certainty that by reducing the taxes for those who have annual income above $1M to 5% while
leaving all other income level's taxes the same that you could eliminate the deficit in 5 years. Obviously that would greatly increase the
difference between the rich and the poor, but would lead to better fiscal health for the country. Would you support it? Many of the folks who are
"Tax the Rich" proponents would not. They would not because they are not interested in economics, but rather penalizing the rich.
The vast majority of "rich" folks in this country are small business owners who file individual tax returns, capturing the income from their
business as regular income. Of course its not true income, because it has to be put back into the business to maintain and grow it, but the
government taxes it as such. The typical rich person is not Paris Hilton or the Wall Street banker with 6 cars and a jet.
As it relates to both Paris Hilton and the banker, they will simply avoid taxes. John Kerry, mr champion of the little people is a billionaire, yet
has his yacht registered in Rhode Island to avoid Mass. taxes. The Kennedys pay no taxes. None of these folks pay taxes because all of their
money is placed in trust and the trust owns all of their assets. These folks don't own their homes, cars or boats. The trust owns them and tax
rates on trusts are negligible. They manage their trusts such that they dollar cost average and take sufficient losses to cancel out the taxes while
at the same time building their long term wealth by buying more shares of stock.
Also, the banker will simply take more of his income in forms other that regular cash compensation. They will take deferred compensation, stock
options that are treated as income only when exercised and stock, driving the taxes down to capital gains. If the situation gets too severe, they
will simply move outside of the US. Why do you think that most new listings are not on the London Exchange? They are on the London Exchange so that
companies don't have to comply with nonsense like Sarbanes Oxley and because the executives don't want to be burdened by US taxes. Oh, I know, US
citizens (one of the few countries in the world with this tax policy) requires declaration of all income regardless of where it is made. Believe
me, there are easy ways out of that and the US banker who lives and works in Dubai, London or Tokyo are not declaring the vast majority of their
income. With all of your class warfare talk - you would not either if you could get away from it.
All taxing the rich does is make people feel better