Saturday, December 11, 2010

A "rich guy" explains why taxing the rich doesn't work--they will "shrug out"

Karl Denninger at The Market Ticker is a good daily (or even multi-daily) read.

This post by Karl describes why America can't save itself by taxing the rich. Two reasons: Number one, they don't have enough money to close the budget deficit. Number two, as Karl pithily explains, after describing the incredible amount of work and sacrifice of personal time needed to create and sustain an entrepreneurial venture:
"There have been plenty of years where I've written really big checks to the IRS, and not all of them were related to MCSNet. The last few years have been pretty good. But this much I can tell you - if the government was to, for example, tax everything I made at 90% beyond $200,000, I would never make more than $200,000 a year again. Ever. I will not work hard to earn that money only to turn 90% of it over to the government.
"The motivation to do this - to take the risk of material loss of one's capital and to trade one's personal life off like this instead of being a working drone that works for "the man" from 9-5 and then comes home to watch "Dancing With The Stars" - is money. Remove that motivation by confiscating what I earn and I will stop doing it and sit in my hottub drinking Cognac or fishing every day instead - that's a promise and a fact, and your illusory "tax revenue" will fail to materialize."

Good on you, Karl, you're exactly right. Soak the rich, and they will stop pulling the cart.

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