I didn't agree on much with the late Senator Paul Wellstone (park the bus, it's long past time, folks), but one thing he noted shortly before he died was that corporations really don't pay taxes--they pass them on to that business' customers if at all possible. Well said.
Now let's extend that valid logic to the wealthy (either high income or high assets). They, too, get their resources largely from the companies they own and often run. So what happens when one taxes the rich heavily? Well, that gets priced into the business plan, doesn't it? And the end result is that the rich people don't suffer as much as the poor person who pays more for the products he needs, gets fewer job opportunities because the company owned or run by the wealthy person isn't hiring, and finally when he does get a decent job, his path to prosperity is hindered because his income, too, is taxed at the higher rate.
I'd dare suggest this is a big reason why class mobility was higher a century ago than it is now; the barriers to employment and accumulation of wealth were not there, and those who want to "soak the rich" need to consider who is most hurt; the poor, and they get hit at least three ways that I can figure.
Moreover, we need to consider the possibility that all workers in effect price in the cost of taxation into their wages. I do not, for example work for a specific price per year, but rather aim to achieve my financial and earthly goals--paying for a nice home, nice things for my wife and I, college educations for my children, and the like. Just ask any contract worker if they price taxes and benefits into their fees, for example.
So what we have here, really, is a simple equation; all taxes boil down to taxes on consumption, and the question is simply whether we implement our consumption tax efficiently and sanely, or whether we impose exorbitant costs by our means of taxation. Our current system, beyond enabling the IRS to go into all kinds of detail about our personal lives, is said to impose costs of hundreds of billions of dollars to our economy before the government gets one red cent in revenue.
Maybe it's time to go to consumption based taxes and abandon the experiment that started with the 16th Amendment. For the poor.
The 3 Keys to Balancing Safety and Risk in Raising Your Kids - In this series on overprotective parents, we’ve taken a nuanced look at the phenomenon’s origins, explored the question of whether the world is a more da...
2 hours ago