Surtax on wealthy in UK results in lower revenue

posted at 9:15 am on February 22, 2012 by Ed Morrissey

Barack Obama has spent the last several months insisting on a tax hike for higher income earners in the US, casting it as an issue of “fairness” and of deficit reduction.  In his State of the Union speech, Obama used the word “fair” or a derivative nine different times, and calling for the wealthy to pay their “fair share” of taxes — even though the wealthy account for a much higher percentage of income-tax revenues both as a share of the revenues and as a share of income than the rest of the population.  Democrats have tried to push through a “surtax” on income over a million dollars in a year in order to put Obama’s rhetoric into reality.

Speaking of reality, the UK did exactly what Obama and the Democrats propose to do here — pass a surtax on high-income earners.  The new tax rate of 50%, which took effect at the beginning of the year, was expected to raise a billion pounds in extra revenue each month.  So how did that work out?  Tax revenues dropped by more than £500 million:

The Treasury received £10.35 billion in income tax payments from those paying by self-assessment last month, a drop of £509 million compared with January 2011. Most other taxes produced higher revenues over the same period.

Senior sources said that the first official figures indicated that there had been “manoeuvring” by well-off Britons to avoid the new higher rate. The figures will add to pressure on the Coalition to drop the levy amid fears it is forcing entrepreneurs to relocate abroad.

The self-assessment returns from January, when most income tax is paid by the better-off, have been eagerly awaited by the Treasury and government ministers as they provide the first evidence of the success, or failure, of the 50p rate. It is the first year following the introduction of the 50p rate which had been expected to boost tax revenues from self-assessment by more than £1billion.

Oopsie!  It turns out that the wealthy can find ways to shelter income when government drives the cost of taxes high enough to make it worthwhile.  If that means taking their money and going where the tax laws are more welcoming to investment, then this particular population has fewer barriers to making that solution work than most of the middle class.  Instead of gaining more revenue, the UK will end up losing revenue, and not just from the sheltering — but also in lost economic growth as the wealthy have to put that capital to sleep rather than make it work in the economy.

Obama’s plan to hike capital-gains taxes to 20% and push a surtax on higher earnings will produce the same result here.  The capital that might have gone to work in the US will go to work somewhere else or not at all, which will not just kill the direct revenues expected in static tax analysis from the hike, but also discard the revenues that would have occurred had the capital been put to work here.  That’s the lesson from the British face-plant on surtaxes, and hopefully the US learns that lesson the easy way.


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Can we call the Laffer curve “Laffer’s law” yet?

Meric1837 on February 22, 2012 at 9:16 AM

Surely, you jest…

coldwarrior on February 22, 2012 at 9:18 AM

Does this surprise anyone?

Oh yeah – those that think they can forget about basic human nature and think that Punishing an activity won’t discourage that activity.

Chip on February 22, 2012 at 9:19 AM

This is the double down president….

Those ‘ENGLISH’ folks didn’t do it right, ill show them

cmsinaz on February 22, 2012 at 9:20 AM

It didn’t work in the UK.
It certainly wouldn’t work here.
But we knew that before seeing this post.

22044 on February 22, 2012 at 9:20 AM

“But, but, more taxes has to bring in more revenue. It doesn’t make sense!” – A typical liberal.

Logus on February 22, 2012 at 9:20 AM

It would only work if the richest people were also the dumbest people, but it doesn’t seem to work that way.

RBMN on February 22, 2012 at 9:21 AM

No, really, is that right? Who knew? You mean 0 could be mistaken? No, really? Who knew?

Bmore on February 22, 2012 at 9:21 AM

Old and busted:The Internet interprets censorship as damage and routes around it.”

New hotness: “Capital interprets excessive taxation as damage and routes around it.”

ExUrbanKevin on February 22, 2012 at 9:21 AM

Does this surprise anyone?

Chip on February 22, 2012 at 9:19 AM

Only the morons over there, and over here, who thought it would work.

cozmo on February 22, 2012 at 9:21 AM

The worst part is, the morons in the government have likely spent based on the extra billion in revenue that did not materialize. So now the “shortfall” is even worse!

Sekhmet on February 22, 2012 at 9:25 AM

What’s the score now?

Common sense: 10,789,415,334

Liberalism: 0

logis on February 22, 2012 at 9:25 AM

One of the weaknesses of Laffer’s law that is used by the left is epitomized by the statement… “well, if they raise taxes on you, will you quit?” Turns out you will. Just not right now. A study (and I was not able to find it – I’ll post it later when I do) states that when taxes are higher, wage earners in the middle enter the workforce later in life, and if they can afford it, exit it sooner. So the very rich, who are a small portion of the population, have one behavioural response. Middle class workers have another. The very poor (if they were taxed) would probably jump ship to take advantage of welfare. Which, by the way, is exactly what is happening. A kind of reverse laffer’s law keeps people out of the workforce when they get a certain amount of welfare…

deadite on February 22, 2012 at 9:25 AM

Senior sources said that the first official figures indicated that there had been “manoeuvring” by well-off Britons to avoid the new higher rate. The figures will add to pressure on the Coalition to drop the levy amid fears it is forcing entrepreneurs to relocate abroad.

Money flees taxes.

I need to write a book with that title.

If I have another argument with my Lefty pals about “fairness” in the tax codes, I’m going to barf.

mankai on February 22, 2012 at 9:26 AM

Old and busted: “The Internet interprets censorship as damage and routes around it.”

New hotness: “Capital interprets excessive taxation as damage and routes around it.”

ExUrbanKevin on February 22, 2012 at 9:21 AM

Quoted for truth

Sekhmet on February 22, 2012 at 9:26 AM

Theyre just not doing it right.

Chuck Schick on February 22, 2012 at 9:28 AM

Liberals are incapable of conceiving of the idea that if you raise the tax rate, the pie grows smaller so you end up taxing less money at a higher rate and revenues decrease.

Cannot conceive of it despite its utter simplicity.

Higher tax rates have one effect. They stop money from moving. Money stops moving and the economy stagnates, like a fetid pool. Lower tax rates make the water move like rapids. It is full of life and vigor.

Again, Liberals cannot conceive of this. They are linear thinkers and cannot think in abstractions. Despite their claims of superior intellect they are actually quite stupid.

mitchellvii on February 22, 2012 at 9:28 AM

I’ll give you five pounds of coffee, if you can show me where in history, bending over the wealthy has brought greater revenue in, for any extended period of time.

KOOLAID2 on February 22, 2012 at 9:28 AM

calling for the wealthy to pay their “fair share” of taxes —

The wealthy do pay their fair share of taxes. It is those most likely to be rabid Obama supporters who pay nothing toward government even though they are heavy users of entitlement programs.

What we need is tax reform starting with a flat tax on all Americans even the deadbeats at the lower end of the income scale.

Happy Nomad on February 22, 2012 at 9:28 AM

Higher taxation reduces the velocity of money, pure and simple. Less money in the economy, less jobs created, less income tax overall. Money sheltered is money hidden from the economy.

To liberals, the economy is just a big cookie jar of money. The ignorant simplicity in that view is painful, to themselves and to everyone around them.

beatcanvas on February 22, 2012 at 9:28 AM

Does this surprise anyone?

Chip on February 22, 2012 at 9:19 AM

Only the morons over there, and over here, who thought it would work.

cozmo on February 22, 2012 at 9:21 AM

I often wonder at just why on God’s green earth Leftists think they are the true geniuses of us all.

They Rob people of their income people will produce less income.

Reduce the supply of petroleum as done by our dear leader El Presidente Downgrade and prices go up.

Just where is the intelligence of those folks?

Chip on February 22, 2012 at 9:29 AM

We all know that real-world evidence doesn’t matter to a liberal, tax and spend, Democrat.

Mord on February 22, 2012 at 9:29 AM

Never ceases to amaze me that politicians act as if their laws are being imposed in a vacuum, as though people will not exercise free will and change their behavior. Many countries in Europe in fact already have high taxes on the “rich” – Italy, for example. But these taxes never bring in enough revenue, because people make a concerted effort to avoid them. Paying off the local tax collector is a standard business practice in Italy; in fact, avoiding taxes is common practice in most of southern Europe (if you have ever taken a cab there, you know that they just about always ask for cash). When the tax rates become punitive, people have more incentive to avoid paying them. Basic human nature.

TouchdownBuddha on February 22, 2012 at 9:29 AM

We need spending reform first.

Amjean on February 22, 2012 at 9:31 AM

So let me see if I’ve got this straight – they levied a 50% tax, all at once? Is that right?

No freaking WONDER there’s people trying to evade it! That’s not taxation, that’s highway robbery! There’s no way to adjust to that kind of revenue impact without serious pain unless you’re a bloody billionaire.

(this also makes it more clear why Obummer and co. want a ‘global minimum tax’)

MelonCollie on February 22, 2012 at 9:31 AM

Doc Zero on ‘Fairness’:

Creating the unbounded State The formula is not complicated.
by John Hayward

How can the centralized State accumulate unlimited power, while still retaining the outward form of a democracy? This question has been the obsession of the American Left for over a century. The answer lies in subduing the middle class, which is always the deadly enemy of statism.

To subdue the middle class, it must be made dependent upon the State.

Three crucial techniques are needed to get the State past the point of no return. First, an open-ended mission is needed. It must be possible for the State to define the terms of this mission, so that no one can ever say it has been completed, or that the State has failed. Every totalitarian government in modern history has adopted the same mission Barack Obama now openly declares: the quest for “fairness.”

The second key to the unbounded State lies in convincing the populace that government power should not be limited by arbitrary rules. This is very important, and the American Left has enjoyed considerable success.

Finally, it is necessary to persuade the middle class to think of itself as poor. Simple logic must be abandoned, in favor of soothing promises. The depth of its compassion must be the only yardstick by which the State is judged.

http://www.humanevents.com/article.php?id=49555

Chip on February 22, 2012 at 9:31 AM

Say it ain’t so, Ed!

CatoRenasci on February 22, 2012 at 9:31 AM

Shocka! Looks like they’re gonna have to go to a 100% tax…and maybe imprisonment of rich folks. Make ‘em do the jobs regular Britons won’t.

Rational Thought on February 22, 2012 at 9:32 AM

The problem is having the wrong people in charge…

It’ll work if the right people get elected.

coldwarrior on February 22, 2012 at 9:32 AM

Inconceivable!

DamnCat on February 22, 2012 at 9:35 AM

Seems 0′s new budget cuts corp tax to 28% but also taxes corp overseas profits. Yeah, that will make the corp stay in the USA.

marinetbryant on February 22, 2012 at 9:36 AM

ummm … didn’t we try this in NY … something called the millionaires tax or something … and surprise … millionaires LEFT the city .. to escape the tax ….
what is it called when you do the same thing over and over and expect a different result ???

conservative tarheel on February 22, 2012 at 9:37 AM

Higher taxation reduces the velocity of money, pure and simple. Less money in the economy, less jobs created, less income tax overall. Money sheltered is money hidden from the economy.

To liberals, the economy is just a big cookie jar of money. The ignorant simplicity in that view is painful, to themselves and to everyone around them.

beatcanvas on February 22, 2012 at 9:28 AM

Thank you.

I had an argument with my macroeconomics professor about taxation and the velocity of money back in 1987. To his credit, after discussing it in front of the class (using his own economic models), he had to concede that there is a relationship between taxation and velocity.

He started the lecture by trying to blame banks for stifling the velocity of money (banks being evil and all), but fell into his own trap. I didn’t even discuss the banks and went straight for tax policy.

Tax revenues soared in the 80s after the top rate was cut from 70% to 28% for two reasons: no one is going to expose a dollar earned to 70% taxation if he can and the government hindering commerce by redirecting money into non-productive areas (mostly running itself) leads to less real economic activity that is taxable.

But I like what Friedman said… if you cut taxes and revenues increase, you haven’t cut them enough. :)

mankai on February 22, 2012 at 9:38 AM

I’m just always struck by the irony that our President who attended Columbia and Harvard, then taught at the University of Chicago, is always talking about taking more from the rich. You mean like the people responsible for the fact that the school that gave you your law degree has a 35 BILLION dollar endowment, Mr. President? People like John D. Rockefeller, who gave the money that got the school you taught law at built, Mr. President?

radjah shelduck on February 22, 2012 at 9:39 AM

marinetbryant on February 22, 2012 at 9:36 AM

But the new Obama tax rate on dividends is going up, up, up…about 45% on dividends.

So, invest overseas…and keep that money offshore…and well sheltered.

Maybe stuffing it in the mattress?

Buy gold. Stuff that under the mattress.

coldwarrior on February 22, 2012 at 9:40 AM

Economics 101.

Rohall1215 on February 22, 2012 at 9:40 AM

ohh an economy thread!!?!? thats a big no no! we cant focus on these issues while Satan is plotting against our country! what are you thinking!

nathor on February 22, 2012 at 9:41 AM

The problem is having the wrong people in charge…

It’ll work if the right people get elected.

coldwarrior on February 22, 2012 at 9:32 AM

You have that backwards as demonstrated by Stalinist Russia and Maoist China. The problem is that the wrong type of peasants are subjects of the state. If we kill enough of the wrong ones we will create a 10 billion year utopia.

The only logical end to the fairness doctrine is to kill the humans when human nature refuses to cooperate.

NotCoach on February 22, 2012 at 9:43 AM

Not only will this valuable evidence be ignored so that we can implement this tax policy here, but after it fails, the big-government dems will spin it that it actually did work, or it’s Repubs fault that it didn’t.

Jackalope on February 22, 2012 at 9:43 AM

Somehow, this is Bush’s fault…or Haliburton.

Deafdog on February 22, 2012 at 9:43 AM

The wealthy always find ways to avoid the higher tax rates? Like John Kerry docking his yacht in a different state with a lower yacht tax? Or Tim Geithner somehow not being able to run his tax program correctly to generate the right amounts? Or Charlie Rangel simply “forgetting” about extra revenue? Stuff like that?

Marxism is for dummies on February 22, 2012 at 9:44 AM

Those who fail history are doomed to repeat it.

The British have notoriously had problems with taxation on high earners, leading to David Bowie, Sean Connery, Michael Caine, Mick Jagger, and others moving from the UK to Switzerland or the Bahamas “for tax purposes” because they refused to pay the 83% tax rate demanded in the 70s.

teke184 on February 22, 2012 at 9:44 AM

It’s still a success – the bureaucrats still made the rich jump to their whim. It’s not about revenue, it’s about control. Remember when O’Reilly asked Obama about the capital gains tax in 2008, saying that raising it reduces revenue and Obama said it should be raised anyway because of fairness?

zmdavid on February 22, 2012 at 9:45 AM

NotCoach on February 22, 2012 at 9:43 AM

\Ahhhh…enlightenment. Thank you.

Must repair to Washington, and throw myself on the fire…”Obama, my Life for You!!!!”

coldwarrior on February 22, 2012 at 9:45 AM

How many people Remember “The Luxury Tax”?

You know, the tax that wasn’t stopped by the words, “Read My Lips.”That tax, the one Romney Advisor John Sinunu brokered with George Mitchell.

Anyway, that tax was supposed to address Defecit Reduction as well.

Only, it didn’t raise the revenue expected, and it DESTROYED the Boat Building Industry in America costing Blue Collar workers Thousands of Jobs.

It was quietly repealed during the Clinton Administration, with little or no fanfare, or any mention whatsoever on the MSM.

jaydee_007 on February 22, 2012 at 9:49 AM

…no one is going to expose a dollar earned to 70% taxation if he can and the government hindering commerce by redirecting money into non-productive areas (mostly running itself) leads to less real economic activity that is taxable.

mankai on February 22, 2012 at 9:38 AM

Love that word, exposure. Some people are good with money and building and creating. What benefit to society can possibly come from hindering that talent?

It’s like aspiring to build a football team that is equal in talents not by making them work to achieve it but by tying all of their shoestrings together so that they can all run at the same speed. No one wants to watch that game. And no talented player would ever participate in such a farce. For the sheer enjoyment of it, they’d play in the sandlot.

beatcanvas on February 22, 2012 at 9:49 AM

The Won hates the UK anyway so it will be ignored.

Dingbat63 on February 22, 2012 at 9:50 AM

Can we call the Laffer curve “Laffer’s law” yet?

Meric1837 on February 22, 2012 at 9:16 AM

Would it do any good when we have a pØseur POTUS?
“Laffer’s Law” is a great name for it, but when a man is bereft of common sense, what good will it do? Besides, Barry Soetero would ignore it. He “Won”, ya know.
(sigh)

~(Ä)~

Karl Magnus on February 22, 2012 at 9:50 AM

lalalalalalalalalalalalalalalalalala

/libfreeordie
/ernesto
/moonbat
/crr6

NoFanofLibs on February 22, 2012 at 9:51 AM

Economic illiteracy is the foundation of Modern Liberalism.

visions on February 22, 2012 at 9:51 AM

I’m just always struck by the irony that our President who attended Columbia and Harvard, then taught at the University of Chicago, is always talking about taking more from the rich. You mean like the people responsible for the fact that the school that gave you your law degree has a 35 BILLION dollar endowment, Mr. President? People like John D. Rockefeller, who gave the money that got the school you taught law at built, Mr. President?
radjah shelduck on February 22, 2012 at 9:39 AM

There is not a day that goes by when Barack Hussein Obama doesn’t think about all the generosity he’s been given throughout his life by people who (until very recently) had more money than him.

And it fills him with an unquenchable rage.

logis on February 22, 2012 at 9:51 AM

jaydee_007 on February 22, 2012 at 9:49 AM

So, what you are saying is that the “rich” and their money are somehow responsible for generating real jobs??? Actual jobs?

Who’da thunk.

Wow. Just Wow. /

coldwarrior on February 22, 2012 at 9:53 AM

Britain Records Biggest Budget Surplus in Four Years: Economy
February 21, 2012, 7:06 PM EST
Bloomberg

The U.K. budget figures showed that receipts rose 2.8 percent in January from a year earlier. The government receives a fifth of all taxes on company profits and gets final payments of income tax for the previous fiscal year in January. In the first 10 months of the fiscal year, the deficit narrowed to 93.5 billion pounds from 109.1 billion pounds. Government revenue increased 4.7 percent and spending grew 1.6 percent.

plewis on February 22, 2012 at 9:53 AM

Don’t worry.
Unemployment stimulates the economy.
Valerie Jarret

esnap on February 22, 2012 at 9:53 AM

visions on February 22, 2012 at 9:51 AM

I thought it was one of the pillars upon which our foundations are built.

Isn’t that building foundations on top of pillars thing what Obama said almost four years ago in Denver?

coldwarrior on February 22, 2012 at 9:55 AM

What we need is tax reform starting with a flat tax on all Americans even the deadbeats at the lower end of the income scale.

Happy Nomad on February 22, 2012 at 9:28 AM

Give the man an AMEN!
♫♪ Ahhhhhhmennnnnnn ♫♪

What could be more “fair”?

~(Ä)~

Karl Magnus on February 22, 2012 at 9:56 AM

/crr6

NoFanofLibs on February 22, 2012 at 9:51 AM

Probably time we retired that name. She has not posted in months. I think she must have flunked out of law school and is too embarrassed to post from her parents basement.

NotCoach on February 22, 2012 at 9:56 AM

Smartest president “EVAH”!!

mel23059 on February 22, 2012 at 9:58 AM

beatcanvas on February 22, 2012 at 9:49 AM

+100

mankai on February 22, 2012 at 9:59 AM

Coldwarrior @ 9:45

Baby. Can you dig your man?
:)

cmsinaz on February 22, 2012 at 9:59 AM

Somehow, this is Bush’s fault…or Haliburton.

Deafdog on February 22, 2012 at 9:43 AM

Or Racism.. don’t forget that in the excuse rotation.

Chip on February 22, 2012 at 9:59 AM

Obama’s plan to hike capital-gains taxes to 20% and push a surtax on higher earnings will produce the same result here.

Why does he do it then? Because it is not about revenue, it is about control and increasing the deficit! He works for the FED.

Polish Rifle on February 22, 2012 at 10:00 AM

Ed, Ed, Ed. I thought you would have learned by now. Obama is not concerned with whether or not his tax policies raise revenue. He has said this himself. He wants tax policy to be based on what he considers “fair” regardless of whether it increases or decreases revenue. Raising the capital gains tax rate might result in less tax money actually flowing into the government, but that doesn’t matter, because a 15% capital gains tax rate is unfair.

Shump on February 22, 2012 at 10:00 AM

plewis on February 22, 2012 at 9:53 AM

Those are last year’s taxes. The new punitive rates took effect this year. It is also possible that tax revenues were up because people were cashing in before the new punitive rates took effect.

NotCoach on February 22, 2012 at 10:01 AM

cmsinaz on February 22, 2012 at 9:59 AM

Can’t decide…Flagg or Fielding, which one is my true alter-ego.

coldwarrior on February 22, 2012 at 10:01 AM

“Laffer’s Law” is a great name for it, but when a man is bereft of common sense, what good will it do? Besides, Barry Soetero would ignore it. He “Won”, ya know.
Karl Magnus on February 22, 2012 at 9:50 AM

Supply and demand is not settled science.

Liberalism is the Cult Of The Ego. Ergo, liberal “economic theory” is based on the belief that every liberal is infinitely smarter than every taxpayer. This is at the same time the craziest and most seductive religion that has ever been invented. No amount of reality can penetrate that cocoon of self-satisfaction.

logis on February 22, 2012 at 10:02 AM

When Australia brought in the perks and lurks tax (Fringe Benefits Tax), under a Labour govt (natch), it was quite amusing to see the contortions that many went through to avoid paying it. A classic case of: when is a door not a door.

OldEnglish on February 22, 2012 at 10:05 AM

crr6

NoFanofLibs on February 22, 2012 at 9:51 AM

Probably time we retired that name. She has not posted in months. I think she must have flunked out of law school and is too embarrassed to post from her parents basement.

NotCoach on February 22, 2012 at 9:56 AM

I’d like to think that we educated her a bit and she’s seen the light (perhaps along with seeing how much she was being screwed in taxes with her first paycheck).

And now she’s too embarrassed to post a Mea culpa, and hop on board the side that is actually defending Liberty.

I think we would all forgive her and welcome her transformation if she were to come back.

Chip on February 22, 2012 at 10:05 AM

mankai on February 22, 2012 at 9:59 AM

Joe the Plumber takes on Obama in basketball, and tries to apply Obama’s economic rules…

http://www.guvsux.com/guvsux_20081017.jpg

beatcanvas on February 22, 2012 at 10:05 AM

Obviously they just didn’t raise the tax enough.//

Oldnuke on February 22, 2012 at 10:06 AM

Liberalism is the Cult Of The Ego. Ergo, liberal “economic theory” is based on the belief that every liberal is infinitely smarter than every taxpayer. This is at the same time the craziest and most seductive religion that has ever been invented. No amount of reality can penetrate that cocoon of self-satisfaction.

logis on February 22, 2012 at 10:02 AM

It is a seductive philosophy. Who doesn’t “solve” the world’s problems after a few beers? But at least I know the difference between buzzed philosophizing and actually imposing my will upon others.

NotCoach on February 22, 2012 at 10:06 AM

Still waiting for that tax donation from Mr. Buffet…

Surely, you jest…

coldwarrior on February 22, 2012 at 9:18 AM

Don’t call me Shirley… ;-)

ChicagoBlues on February 22, 2012 at 10:09 AM

A classic case of: when is a door not a door.

OldEnglish on February 22, 2012 at 10:05 AM

Years ago in some localities (might even have been statewide) houses were taxed on the number of doors they sported. Windows were developed that were large enough for people to walk through and they were equipped with a swivel mechanism that allowed them to be swung up into the interior much like a present day garage door. These ‘windows’ took the place of several exterior doors in houses thus reducing the tax levied on the homes.

Oldnuke on February 22, 2012 at 10:10 AM

Paging Bayam, come in Bayam.

Bayam?

Bueller?

angryed on February 22, 2012 at 10:12 AM

Joe the Plumber takes on Obama in basketball, and tries to apply Obama’s economic rules…

http://www.guvsux.com/guvsux_20081017.jpg

beatcanvas on February 22, 2012 at 10:05 AM

Joe the Plumber needs to confront Romney on his tax plan… which punishes people making over $200K/yr.

mankai on February 22, 2012 at 10:13 AM

Coldwarrior

Heh :)

cmsinaz on February 22, 2012 at 10:15 AM

I know that on line polls are shaky but I was surprised that a high percentage think the tax is a bad idea.

Cindy Munford on February 22, 2012 at 10:15 AM

The thing is – this evidence will not matter.

Taxing the rich is not about raising revenue for the left – it is about punishing the rich and “fairness”.

Obama said as much in the last campaign. He admitted he would raise rates even if he knew it would result in less revenue.

It has never been about fiscal responsibility and never will be about fiscal responsibility. those terms have no meaning to liberals.

Monkeytoe on February 22, 2012 at 10:16 AM

M-o-o-n, that spells surtax

:)

cmsinaz on February 22, 2012 at 10:17 AM

Andrew Mellon (Coolidge’s Treasury Secretary) figured this out in the 1920s. Why do we have to keep re-learning it?

Because to Libs it’s not about revenues. It’s about “fairness”.
Oblamer said so to Charlie Gibson a couple years ago.

Dexter_Alarius on February 22, 2012 at 10:19 AM

Andrew Mellon (Coolidge’s Treasury Secretary) figured this out in the 1920s. Why do we have to keep re-learning it?

Because Libs are convinced that their core beliefs are correct and that people just haven’t implemented them correctly before.

teke184 on February 22, 2012 at 10:20 AM

Joe the Plumber needs to confront Romney on his tax plan… which punishes people making over $200K/yr.

mankai on February 22, 2012 at 10:13 AM

Didn’t Romney say that he was going to present a revised tax plan? Has he done that yet?

beatcanvas on February 22, 2012 at 10:20 AM

That’s just because Britain doesn’t have the dynamo with the Harvard Poli Sci degree in charge.

Yes we can! Better than Britain!

MNHawk on February 22, 2012 at 10:21 AM

One of the weaknesses of Laffer’s law that is used by the left is epitomized by the statement… “well, if they raise taxes on you, will you quit?” Turns out you will. Just not right now. A study (and I was not able to find it – I’ll post it later when I do) states that when taxes are higher, wage earners in the middle enter the workforce later in life, and if they can afford it, exit it sooner. So the very rich, who are a small portion of the population, have one behavioural response. Middle class workers have another. The very poor (if they were taxed) would probably jump ship to take advantage of welfare. Which, by the way, is exactly what is happening. A kind of reverse laffer’s law keeps people out of the workforce when they get a certain amount of welfare…

deadite on February 22, 2012 at 9:25 AM

There’s an additional component too.

I am one of those evil rich people that is destroying the country. My wife doesn’t work, she’s one of those crazy women who stays home to raise our kids instead of sending them off to daycare farm.

Anyway, she looked into getting a part time job a while ago as the kids have become a little older and both go to “school” in the morning for a few hours. It wasn’t worth it. Every single dollar she’d earn would be taxed at the highest tax bracket because it would be added to my income. On top of that she’d have to pay 7.65% FICA on every single dollar as well. So right off the bat she’d be paying 43% of her income in tax. She’d be making $10, 15 an hour and paying an effective tax rate of 43%. Insanity. Which is why we decided, it’s simply not worth it. And this is one of thousands of examples of high taxes discouraging people from working.

angryed on February 22, 2012 at 10:21 AM

The left progressives want “fairness” in taxes?

Does that mean cut taxes at the higher end and impose taxes on the poor?

Flat tax?

I fear that the progs will also want to define what is “fair”.

freedomfirst on February 22, 2012 at 10:22 AM

Oldnuke on February 22, 2012 at 10:10 AM

Just after the Glorious Rearrangement of 1688, a window tax was introduced, and lasted until the 1800s. During my home ownership in England, I was subject to a toilet tax!

OldEnglish on February 22, 2012 at 10:23 AM

It is a seductive philosophy. Who doesn’t “solve” the world’s problems after a few beers? But at least I know the difference between buzzed philosophizing and actually imposing my will upon others.

NotCoach on February 22, 2012 at 10:06 AM

Wasn’t there a post yesterday where you described your transition from liberal to conservative? I too have made that journey. And it’s true, after a few beers it’s tempting to say “I’ve got it! All we have to do is force people to…” but then the mental liberty-alarm goes off in my head and I’m reminded why I’m a conservative. I’ve always thought that’s what seperates us from the “liberals.”

I use that word in quotes because liberals long ago abandoned liberty. Once their mental alarm no longer went off they can justify any governmental mandate as long as the means justify the ends, and they never seem to understand that “governmental compulsion” is just a more polite term for slavery.

Meric1837 on February 22, 2012 at 10:23 AM

Well there’s only one obvious solution to this problem for the liberals in Britain, UP THE TAX TO 75%. That will teach those rich people!

GarandFan on February 22, 2012 at 10:24 AM

It didn’t work in the UK.
It certainly wouldn’t work here.
But we knew that before seeing this post.

22044 on February 22, 2012 at 9:20 AM

And we have been saying it a long time. People with money can take it to more hospitable places. The tax and spend whackjobs just don’t get it. Oh thats right, THEY DONT PAY THE TAXES THEY MOUTH OFF ABOUT EITHER.

They lie and the only people who get burned are those of us who dont have enough resources to flee or another place to go.

So we must undo all the stupidity they layer upon us. And prevent it from happening again.

dogsoldier on February 22, 2012 at 10:26 AM

It didn’t work in the UK.
It certainly wouldn’t work here.
But we knew that before seeing this post.

22044 on February 22, 2012 at 9:20 AM

The Brit’s (& Europe at large) are showing us what not to do in so many ways in regards to healthcare, immigration and taxation. It appears some people, I’m looking at you liberals and RINO’s, are to stupid to learn from the mistakes of others.

VikingGoneWild on February 22, 2012 at 10:30 AM

I was subject to a toilet tax!

OldEnglish on February 22, 2012 at 10:23 AM

No sh*t??? :-)

Visited UK a good number of times over the years, more so in the 80′s…and at one or two local inns back then I found they were using some really antiquated televisions…almost fire-traps, they were. Seems if they got new ones, that had color, or actually were tunable, the taxes they’d be liable for far (sales, use, and the BBC tax) out cost the actual replacement of the old tellie.

Taxes are the culprit.

Along with wildly excessive government spending on things for which government has no business.

coldwarrior on February 22, 2012 at 10:35 AM

OldEnglish on February 22, 2012 at 10:23 AM

Bet that tax was a lulu…

coldwarrior on February 22, 2012 at 10:36 AM

I’m shocked, shocked, I say. What was that definition of insanity again? Doing the same thing over and over and expecting a different result? Anyone for a try at cutting spending? Anyone? Anyone?

talkingpoints on February 22, 2012 at 10:39 AM

Since the 1940′s, no matter the tax rate, total tax recepits never exceed 20% of GDP.

In fact, receipts as a percent of GDP have been in the 17% to 20% range whether the tax rate was 90% or 30%.

Go figure that folks just want to keep their damn hard earned money.

BacaDog on February 22, 2012 at 10:40 AM

coldwarrior on February 22, 2012 at 10:36 AM

Haha! It seemed that, if one didn’t want to get caught short, one had to pay more.

Colour tv tax was horrendous, compared to black and white only. It was largely responsible for the slow take-up of colour programming in the UK.

OldEnglish on February 22, 2012 at 10:42 AM

It has never been about fiscal responsibility and never will be about fiscal responsibility. those terms have no meaning to liberals.

Monkeytoe on February 22, 2012 at 10:16 AM

Let’s see, Clinton had a surplus in each of his last three years in office and Reagan and the Bushes were three of the worst deficit spenders in history. Well, it’s a nice sentiment, but facts don’t back you up.

sob0728 on February 22, 2012 at 10:44 AM

Now one really clever fellow figured out what this sort of thing means:

Insanity: doing the same thing over and over again and expecting different results.
-Albert Einstein

When the liberals or the left in general think about taxation they demonstrate a mental disorder that can actually be examined.

They have forgotten that fairness is in the eye of the beholder and that the best, the very best, we can hope for is equality of treatment from government. Not special treatment nor mistreatment based on income, wealth, stature, or what your RBI is this season.

Unfortunately they have progressed from objectively equal to merely ‘fair’ and, thusly, forget that human nature rules and that they are being ruled by it, not controlling it. For all the supposed intellegence liberals and the left tout, they just aren’t too smart.

ajacksonian on February 22, 2012 at 10:46 AM

I’m shocked, shocked, I say. What was that definition of insanity again? Doing the same thing over and over and expecting a different result? Anyone for a try at cutting spending? Anyone? Anyone?

talkingpoints on February 22, 2012 at 10:39 AM

Do you know why Democrats pee their pants when a government shutdown looms? Because they fear that no one will miss the government largesse and life will still go on as usual. That would open a lot of people’s eyes. If they really believed their own baloney they would privately welcome a shutdown just to prove their point.

When you dig a hole and find nothing but misery at the bottom of the hole, but your entire philosophy was built upon digging holes, the last thing you will ever do is fill the hole in.

NotCoach on February 22, 2012 at 10:47 AM

Let’s see, Clinton had a surplus in each of his last three years in office and Reagan and the Bushes were three of the worst deficit spenders in history. Well, it’s a nice sentiment, but facts don’t back you up.

sob0728 on February 22, 2012 at 10:44 AM

And who is the worst deficit spender in history? Never mind, you won’t answer that.

So you are saying tax revenues went down after the Reagan and Bush tax cuts? Is that what you are saying? Because it must be what you are saying considering this thread is about revenues going down in Britain after tax rates were increased.

NotCoach on February 22, 2012 at 10:51 AM

I think we would all forgive her and welcome her transformation if she were to come back.

Chip on February 22, 2012 at 10:05 AM

I am always ready to forgive a liberal who has seen the light …..

conservative tarheel on February 22, 2012 at 10:57 AM

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