Why "Soaking the Rich" Doesn't Work

Posted: Jun 16, 2011 10:26 PM
In the Wall Street Journal, Alan Reynolds has a must-read: "Why 70% tax rates won't work."

In essence, the piece illustrates, chapter and verse, the history that reveals that more money actually flows to the Treasury when there are lower tax rates -- no doubt because of the growth and entrepreneurship spurred by people being allowed to keep more of what they themselves have made.

One would think that would be enough to convince Democrats that raising taxes on "the rich" isn't going to solve any of America's problems.  It proves that lower tax rates produce higher revenues (at least to a point of diminishing returns).  But don't expect these facts to change Democrats' minds about the desirability of raising taxes.  

That's because -- for a lot of them -- taxation isn't just about filling the government's coffers.  It's about collectivism and imposing the left-wing view of "equality," otherwise known as "social leveling." True believers iinclude the President, who once advocated maintaining a higher capital gains rate -- even if it resulted in less money to the Treasury -- "for purposes of fairness," as he put it.