This is discussed in great detail in Art Laffer’s thoroughly enjoyable book “Taxes Have Consequences,” and illustrated with his “Laffer Curve,” which gained recognition during the Reagan admin., when he was appointed to Reagan’s Economic Policy Advisory board.
I am a semi retired CPA, specializing in tax accounting. When I started in 1980 the top rate was 70%. Ronald Reagan’s administration dropped rates dramatically and revenue increased. How? Because when the rates were so ridiculous, high earners “invested” in tax shelters. They were poor investments but the tax benefits shot the ROI up. At the time interest was deductible as well. The reduced rates came with restrictions on tax shelter closing the “loopholes” that existed at the time.
People are not stupid and they are not greedy. They are willing to pay taxes but when it gets confiscatory they figure a way around them.
One of the firs things that Trump said that turned me from a reluctant supporter (I wanted Cruz or Rubio in 2016) was with regard to taxes. When Obama wanted to increase capital gains taxes he was told revenue would not increase. He didn’t care. The objective was to punish the wealthy. In contrast Trump suggested not collecting taxes from low earners. I was of a kind that “everyone should have skin in the game.” Instead Trump said the purpose of taxes was to raise money. It cost more to collect the taxes on low income people than would be collected. So let’s don’t.
It seems that they-who-never-learn are predictably those who’ve spent their lives signing the BACK of paychecks… written by the government.
Those of us who must endure their follies and theories have spent our lives signing the FRONT of checks, written to employees, or by taxpayers, written to the government.
This is discussed in great detail in Art Laffer’s thoroughly enjoyable book “Taxes Have Consequences,” and illustrated with his “Laffer Curve,” which gained recognition during the Reagan admin., when he was appointed to Reagan’s Economic Policy Advisory board.
Later, he was also an economic advisor to Trump.
https://accf.org/2024/05/29/a-con
https://www.heritage.org/taxes/report/the-laffer-curve-past-present-and-future
I am a semi retired CPA, specializing in tax accounting. When I started in 1980 the top rate was 70%. Ronald Reagan’s administration dropped rates dramatically and revenue increased. How? Because when the rates were so ridiculous, high earners “invested” in tax shelters. They were poor investments but the tax benefits shot the ROI up. At the time interest was deductible as well. The reduced rates came with restrictions on tax shelter closing the “loopholes” that existed at the time.
People are not stupid and they are not greedy. They are willing to pay taxes but when it gets confiscatory they figure a way around them.
One of the firs things that Trump said that turned me from a reluctant supporter (I wanted Cruz or Rubio in 2016) was with regard to taxes. When Obama wanted to increase capital gains taxes he was told revenue would not increase. He didn’t care. The objective was to punish the wealthy. In contrast Trump suggested not collecting taxes from low earners. I was of a kind that “everyone should have skin in the game.” Instead Trump said the purpose of taxes was to raise money. It cost more to collect the taxes on low income people than would be collected. So let’s don’t.
If only we the employed, employers, and thrifty folks didn’t have to repeat history along with them!
It seems that they-who-never-learn are predictably those who’ve spent their lives signing the BACK of paychecks… written by the government.
Those of us who must endure their follies and theories have spent our lives signing the FRONT of checks, written to employees, or by taxpayers, written to the government.