You Can’t Tax the Rich

September 15, 2011

They’ll flee the country before you can.

By Thomas Sowell 

Ninety years ago — in 1921 — federal income-tax policies reached an absurdity that many people today seem to want to repeat. Those who believe in high taxes on “the rich” got their way. The tax rate on people in the top income bracket was 73 percent in 1921. On the other hand, the rich also got their way: They didn’t actually pay those taxes.

The number of people with taxable incomes of $300,000 a year or more — equivalent to far more than $1 million in today’s money — declined from over 1,000 people in 1916 to fewer than 300 in 1921. Were the rich all going broke?

It might look that way. More than four-fifths of the total taxable income earned by people making $300,000 a year and up vanished into thin air. So did the tax revenues that the government hoped to collect with high tax rates on the top incomes.

What happened was no mystery to Secretary of the Treasury Andrew Mellon. He pointed out that vast amounts of money that might have been invested in the economy were instead being invested in tax-exempt securities, such as municipal bonds….To Read More…..

My Take – You will note this article is another great “blast from the past”, but it is just as profound today as it was in 1921, maybe more so.   As you read this article there are questions you should be asking yourself. 

When the Congress had their envious small minded desires fulfilled to “tax the rich” at 73% for those who made over $300,000 ….who benefited and who suffered? 

The rich benefited and the government and the working man suffered.  Why.  The rich benefitted because they still had their wealth and enough tax free income to allow them to live the lifestyle they were used to.  The government suffered because they lost huge amounts of tax money and the working man suffered because with all those investment dollars tied up in bonds the job market suffered. 

Now, who benefitted when they dropped the tax rate to 24%?  Everyone!  The government started seeing big dollars role in ,the rich got richer, and the working man could find a job.  So what is the problem?  The problem is envy.  I just don’t understand why anyone cares how much another person makes or how they spend their money.  I don’t care if someone makes five million or ten million.  I care if I have a job.