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Forum Post: Why high taxes will never soak Rich

Posted 6 years ago on April 17, 2012, 6:43 a.m. EST by Dell (-168)
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So long as tax rates are high, rich people will figure out ways to protect their income.

It doesn’t take a tax genius; any rich person can make a phone call or hit a few computer keys and shift his or her investments to tax-free municipal bonds. It’s not good for the economy when capital gets diverted to help finance the excess spending of Detroit or California, but it’s an effective way of stiff-arming the IRS.

Statists often will respond by arguing that we should reform the tax code. But instead of a flat tax, which would rid us of loopholes and would lower tax rates, they just want to end the loopholes and keep tax rates high — or raise them even higher.

Even if lawmakers abolished the various tax-code distortions, they might still be disappointed. The one sure way for rich people to lower their tax bills is by generating less income.

Unlike the rest of us, the rich have a great ability to alter the timing, amount and composition of their income. That’s because, according to IRS data, those with more than $1 million of adjusted gross income get only 33 percent of it from wages and salaries. The super-rich (those with income above $10 million) rely on wages and salaries for only 19 percent of their income.

if we look at the 1988 IRS data, rich people paid more than $99 billion to Uncle Sam. That is, because rich taxpayers were willing to earn and report much more income, the government collected five times as much revenue with a lower rate.

NY Post 04/17/2012



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[-] 1 points by DanielBarton (1345) 6 years ago

The government usually collects 18% of the GDP no matter the tax rate that is straight out of Antony Davies Associate Professor of Economics Duquesne University.

I think that our tax system is fine and just like you said needs to refine its way so there is no loopholes. So that people pay the full 28% or what ever their level is set at

[-] 1 points by Dell (-168) 6 years ago

that just it - you missed the whole point of the article lol! You can make the rate as high as you want - it doesn't mean people will be paying it. In fact - history shows they dont pay it. try re-reading the article.

[-] 1 points by DanielBarton (1345) 6 years ago

sorry i did read it and i know people hide their money and i was trying to support your claim