Saturday, December 10, 2005

If you want the rich to pay more taxes, lower the rates >link<

Long time readers may remember my post from October 14th...TAX REFORM AND OTHER TRAGEDIES, I noted that lowering the top marginal income tax rate causes tax compliance by the wealthy to go up.

Well, the link above is to a story in The Investor's Business Daily that makes the same observation.

A big reason is that tax avoidance recedes along with rates. When top personal rates are high, the rich find ways to pay less. That's why our tax code is 55,000 pages thick. When rates are lower and flatter, such behavior disappears.

This also explains why the richest Americans' share of all income taxes paid has soared to 34.27% from 19.05% in 1980 even though their average income-tax rate has fallen by roughly a third — from 34.47% to 24.31% in 2003.

So, let's soak the rich...LOWER tax rates!


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