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Friday, February 24, 2012

UK Tax Lesson For Obama

As the WSJ points out, raising the tax rates on the wealthy often has the opposite effect as intended. Britain is now learning that lesson. (See Illinois as another example.)

Preliminary figures out this week show that Britain's 50% top marginal income-tax rate may have reduced tax revenue from top earners by as much as 5%, compared to the old 40% top rate.

This is all irrelevant to Obama of course. When noted by George Stephanopolous during the 2008 primary (the last time a reporter dared question a Democrat with a note of skepticism) about the fact that lower tax rates raise revenue and vice versa, Obama simply stated that it was not about dollars, but about "fairness." An absurd answer, but it let everyone know that it was about punishment to him, not maximizing revenue. Let's hope not all politicians are as vindictive and wake up to see the facts.