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Soak the Rich, Lose the Rich
The Wall Street Journal ^ | May 18, 2009 | Stephen Moore & Art Laffer

Posted on 05/17/2009 8:39:49 PM PDT by St. Louis Conservative

With states facing nearly $100 billion in combined budget deficits this year, we're seeing more governors than ever proposing the Barack Obama solution to balancing the budget: Soak the rich. Lawmakers in California, Connecticut, Delaware, Illinois, Minnesota, New Jersey, New York and Oregon want to raise income tax rates on the top 1% or 2% or 5% of their citizens. New Illinois Gov. Patrick Quinn wants a 50% increase in the income tax rate on the wealthy because this is the "fair" way to close his state's gaping deficit.

Mr. Quinn and other tax-raising governors have been emboldened by recent studies by left-wing groups like the Center for Budget and Policy Priorities that suggest that "tax increases, particularly tax increases on higher-income families, may be the best available option." A recent letter to New York Gov. David Paterson signed by 100 economists advises the Empire State to "raise tax rates for high income families right away."

Here's the problem for states that want to pry more money out of the wallets of rich people. It never works because people, investment capital and businesses are mobile: They can leave tax-unfriendly states and move to tax-friendly states.

And the evidence that we discovered in our new study for the American Legislative Exchange Council, "Rich States, Poor States," published in March, shows that Americans are more sensitive to high taxes than ever before. The tax differential between low-tax and high-tax states is widening, meaning that a relocation from high-tax California or Ohio, to no-income tax Texas or Tennessee, is all the more financially profitable both in terms of lower tax bills and more job opportunities.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Miscellaneous; News/Current Events; Philosophy
KEYWORDS: california; democrats; illinois; liberalfascism; maryland; taxcheatparty; taxes; taxtherich

1 posted on 05/17/2009 8:39:50 PM PDT by St. Louis Conservative
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To: St. Louis Conservative
Previous discussion, now locked
2 posted on 05/17/2009 9:23:22 PM PDT by HiTech RedNeck (Beat a better path, and the world will build a mousetrap at your door.)
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To: St. Louis Conservative

Soak the rich, lose jobs too....


3 posted on 05/17/2009 9:24:00 PM PDT by HiTech RedNeck (Beat a better path, and the world will build a mousetrap at your door.)
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To: HiTech RedNeck

And that is a good thing, otherwise people would be discussing the actual editorial...


4 posted on 05/17/2009 9:28:09 PM PDT by Wpin (I do not regret my admiration for W)
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To: St. Louis Conservative

The Atlases of America are starting to shrug.


5 posted on 05/17/2009 9:58:41 PM PDT by RWB Patriot ("Let 'em learn the hard way, 'cause teaching them is more trouble than they're worth,")
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To: St. Louis Conservative

Wow, who’d a thunk it?


6 posted on 05/17/2009 10:09:52 PM PDT by Rocky (OBAMA: Succeeding where bin Laden failed.)
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To: St. Louis Conservative
Here's the problem for states that want to pry more money out of the wallets of rich people. It never works because people, investment capital and businesses are mobile: They can leave tax-unfriendly states and move to tax-friendly states.

Well, they'll just have to fix that, now won't they?

7 posted on 05/17/2009 10:38:51 PM PDT by thecabal (Hey Obama, when you gonna start sharin' the sacrifice?)
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To: St. Louis Conservative
Herbert Hoover was elected. The Hoover administration promoted the Smoot-Hawley tariffs, which resulted in a trade war. Interest rates went up, and the Hoover administration raised top income tax rates from 25% to 63%.

In 1932, Franklin D. Roosevelt was elected; and he immediately pumped in massive amounts of money to "stimulate" the economy.

The higher taxes implemented by Hoover, and the huge government spending initiated by Roosevelt stifled innovation and entrepreneurship.

...a great deal of damage was done to the economy, and a recession that started out no worse than the recession of 1920-21 became the Great Depression.

Not only did FDR raise the top income tax bracket to 79%, but he also proposed to Congress raising it to 99.5%. This proposal did not get through Congress. In April of 1939, after more than eight years of the New Deal, the unemployment rate was 20.7%.

Cynics have said that World War II ended the Great Depression, but Professor Folsom dismisses that theory. He indicated that the economy did not start to recover until Franklin Roosevelt died.

"New Deal or Raw Deal?"

8 posted on 05/17/2009 11:56:17 PM PDT by Daaave ("Where it all ends I can't fathom my friends")
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To: Daaave

bttt


9 posted on 05/18/2009 12:07:35 AM PDT by ConservativeMan55
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To: RWB Patriot

Who is John Galt?

Obama’s about to find out.


10 posted on 05/18/2009 12:12:51 AM PDT by Cymbaline (Bipartisan consensus - that's like when my doctor and my lawyer agree with my wife that I need help.)
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To: St. Louis Conservative

Well, we’ll just have to remedy this little tax “loophole”, won’t we?

So long, state sovereignty.


11 posted on 05/18/2009 1:12:37 AM PDT by Boucheau
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To: St. Louis Conservative; Republican Extremist; Boucheau; betsyross60; kalee; shezza; fanfan; ...
STARVE THE BEAST!

Atlas shrugged ping!

12 posted on 05/18/2009 1:28:08 AM PDT by jellybean (Who is John Galt? ~ Bookmark http://altfreerepublic.freeforums.org for when FR is down)
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To: St. Louis Conservative

What can we do about it? http://pushbackuntil.com


13 posted on 05/18/2009 5:07:07 AM PDT by DennisR (Look around - God gives countless, indisputable, and unambiguous clues that He does, indeed, exist.)
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To: St. Louis Conservative

Now that the libs control the federal govt, their solution will be to take increasing amounts of revenues at the federal level, then parlay these to those states which support the liberal agenda.

you will then have to move away from the USA to keep taxes down.


14 posted on 05/18/2009 6:48:06 AM PDT by bestintxas (It's great in Texas)
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To: St. Louis Conservative

Problem is, they move away from those states to places like Texas but don’t leave their liberalism behind.


15 posted on 05/18/2009 8:28:38 AM PDT by texasmikey
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To: St. Louis Conservative
Here's the problem for states that want to pry more money out of the wallets of rich people. It never works because people, investment capital and businesses are mobile: They can leave tax-unfriendly states and move to tax-friendly states.

Heh, it's not only the 'rich' who do that!

16 posted on 05/18/2009 1:04:42 PM PDT by SuziQ
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To: DennisR

For later...


17 posted on 05/18/2009 3:20:36 PM PDT by Bradís Gramma (Life is but a big granola bar.)
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To: Rocky
Wow, who’d a thunk it?

Well...

Me for one !

18 posted on 05/18/2009 6:00:49 PM PDT by whodathunkit (Shrugging as I leave for the Gulch)
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