Making Too Much Money? (Is there a point when government can say 'You've made enough'?)

American Thinker ^ | 08/17/2012 | Charlotte Cushman

[ctdonath2]

Ronald Regan, as an actor, famously noted that he’d only make 2 movies a year because, facing a 90% tax rate, there just wasn’t any point in making more.

My favorite Leftist was whining about how the “Bush tax cuts for the rich” should be rolled back. I pointed out that, given his numbers, his hated “Wall Street lawyer making a half-million dollars” would find himself having to work an extra week just to pay the increased taxes, and might decide to take that week off without pay instead. He’d suffer a lower net income, but comes a point where easily-afforded leisure becomes preferable. To the Leftist’s confusion, that “Galting” would cut the anticipated tax revenue increase in half.

[scottiemom]

The true test of a democrat is how they define “too much money”. They will always answer, “more than I make”. It is the same mentality that suggests a human being has “lived long enough” and therefore, becomes dispensable.

[mjp]

Making too much money?

Limiting consumption of the rich would result in the destruction of incentives to accumulate and maintain capital and to improve and maintain production.Losses in terms of innovation and the growth of major new industries would be substantial.

Limiting income of the rich would result in the decumulation of capital.

Limiting wealth of the rich by seizure and confiscation is an assault on private property rights and an assault on the improvement of productivity of labor and economic progress

[Pearls Before Swine]

For the government to determine when you have enough or too much money is akin to them deciding when you have enough or too much sex.

...or too much food?

[Nebr FAL owner]

This idea isn’t new Benito Mussolini used the idea of a company making to much profit as a way to enrich himself & create slush funds for his Fascist party in Italy in the 20-30’s. You accuse a company of making an obscene profit & seize whatever arbitrary amount you want for the “common good” only the party gets to keep & use the money.

[MarkL]

This is why the left’s static projections of the revenue they think will be achieved by an increase in taxation levels are invariably wrong.

The leftists' mental disconnect is truly astounding. They seem to adore using taxation to try controlling the actions of people, realizing that if you make something so expensive they will simply stop doing it, they don't seem to realize that if they reduce one's compensation for work past a certain point, people will stop producing.

A terrific example was a casino in Illinois a couple of years ago. The state decided to increase the already "progressive" taxes on the earnings of the casino. The casino simply did a cost/benefit analysis on what the income for the casino would be if they continued to run 24 hours, as opposed to staying open fewer hours. With the new taxes, the casino owners decided to stay open fewer hours. Because of that, not only didn't the state collect much more in taxes, the casino didn't need all the employees, and the casino had to lay off a number their employees. So the net effect of the tax increase on the casino that the legislature saw as a "cash cow," was to actually cost the state money, due to the unemployment compensation and lost taxes of the workers laid off.

Mark

[MarkL]

Limiting consumption of the rich would result in the destruction of incentives to accumulate and maintain capital and to improve and maintain production.Losses in terms of innovation and the growth of major new industries would be substantial.

They tried this with the "millionaire taxes" on things like the boating industry... The result? Rather than the windfall the leftists expected, they pretty much wiped out the US yacht industry, putting an awful lot of people out of work.

Part of Marxist theory is "dialectic materialism," a portion of which is if you break things down far enough, you can understand anything. The problem is that while this works OK in a static system, when you have a dynamic system it falls apart rather quickly. Which is why leftists are usually unable to see the consequences of their policies which are obvious to the rest of us.

Mark