Raising Taxes by a Certain Percentage Does Not Mean Tax Revenues Will Rise by the Same Percentage

A good analogy of this fact from the Wall Street Journal:

Mr. Rangel and House Democrats are also banking on the idea that raising tax rates by 20% will raise 20% more tax revenue, but that’s like telling Wal-Mart it can raise prices by 20% and get 20% more profit. When taxes on the rich rise, their reported income tends to decline. The last time the top federal income tax rate was 50%, the richest 1% paid only about 25% of all income taxes. Today, at a 35% rate they pay nearly 40%.

No related posts.

July 17, 2009 | Filed Under Uncategorized | 1 Comment 

Comments

One Response to “Raising Taxes by a Certain Percentage Does Not Mean Tax Revenues Will Rise by the Same Percentage”

  1. John Gallagher on July 18th, 2009 8:59 pm

    Spot on. No comment necessary. You said it all.

Leave a Reply