Maggie's Farm

Washington is teeing up "the rich" for a big tax hike next year, as a way to make them "pay their fair share." Well, the latest IRS data have arrived on who paid what share of income taxes in 2006, and it's going to be hard for the rich to pay any more than they already do. The data show that the 2003 Bush tax cuts caused what may be the biggest increase in tax payments by the rich in American history.

Whole thing in the WSJ. 

My advice to Dems: No matter how hungry you are, never kill the geese that lay the golden eggs. When peoples' tax rates start hitting 60% (as predicted in NY State under Obama's tax plan), only the ultra-income folks still feel motivated to work hard, to take risks, and to be entrepreneurial and create new jobs. People want disposable income, and they want to save money their own way, for their own personal goals.

Otherwise, they just work less, and some elect to enter the already-huge American "cash economy" - something I hate but which is growing fast. I do hear this more and more often: "$400 for the job for cash, $800 for check or credit card." 

Extreme taxation has already driven the work ethic out of Europe, while Asia relaxes taxes and regulation -and grows like a weed. The goal for America should be that every family can and should be wealthy, remain that way via inheritance, and never be forced to rely on the government (ie, their neighbor's income) for anything they need. Dependency on "government programs" ain't independence. It's forced charity.

Wealth is not a zero-sum game. Wealth is created out of thin air by work, creativity, investment, and risk-taking.