Wednesday, July 18, 2012

Tax What You Wish to Discourage

Taxing activities means you wish to discourage or perhaps even eliminate them.  Cigarette and liquor taxes are a good examples.  Is their purpose revenue or to discourage undesirable activity?  So, why does Obama want higher taxes on the rich?  To discourage?  To eliminate?

One clear reason not to tax the rich is that you want the economy to improve or you want to lower the national debt.  Taxing the rich will actually have the exact opposite effect.

So, the Obama argument is that we should extend the Bush tax cuts for the middle class only if we can guarantee a weaker economy than we have now and offset the middle class tax cuts with lower revenues (though higher rates) from the rich that will increase the national debt.

And half of the nation wants to vote for this.

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