In 1990, when Congress imposed a luxury tax on yachts, private airplanes and expensive automobiles, Sen. Ted Kennedy and then-Senate Majority Leader George Mitchell crowed publicly about how the rich would finally be paying their fair share of taxes. But yacht retailers reported a 77 percent drop in sales, and boat builders laid off an estimated 25,000 workers.
What happened? Kennedy and Mitchell simply assumed that the rich would behave the same way after the imposition of the luxury tax as they did before and the only difference would be more money in the government’s coffers. They had a zero-elasticity vision of the world, namely that people do not respond to price changes. People always respond, and the only debatable issue is how much and over what period.
Amen! Idiot politicians and liberals just assume that taxation doesn’t change behavior, which is absurd. If you tax something, there will be less of it. People don’t stand still to be sheered like sheep. I know of several people who are planning to retire if taxes go higher. Why work to have what you earn taken from you?