Boss
Take a Memo:
You are living in a delusional world of political commentary theories. When you need funds you go out and raise funds. Need something you can't afford, go out an get another job or ask the boss for overtime. Sure, it will put you in a higher tax bracket and cause you to pay more taxes, but it will also give you a bigger income to apply to your budget. In the end, your paycheck revenue is increased. If people making 10 million a year want to quit earning to avoid paying 1% more tax, let them. There are lines of competitors waiting to take their places....they will never approve of raising revenue to pay for it. They will not approve a one percent raise in taxes...
It's because some people are too illiterate to understand that you don't always raise revenues by increasing tax rates. Here is a general rule of thumb: The more you tax something, the less of it you will have. So the more you increase taxes the less you get of whatever you're taxing. Illiterate liberals such as yourself don't realize this. You live in a vacuum where the thing your increasing the taxes on will continue unfettered without change.
Currently, someone who earns income of more than $10 million a year pays the top marginal tax rate of 39.6% and there are quite a few people in America who fall in this bracket. However... raise that rate to 70% or 92% as some have proposed, and suddenly you're going to discover there aren't hardly any Americans earning incomes over $10 million a year. You see... when you are earning that kind of income, you really don't need an income anymore. You can simply stop earning income and avoid the confiscatory taxes, then put all your wealth into securities and tax-free investments.
So this is what happens in reality... not in Liberal Utopialand where all your idiotic plans come to fruition and solve all the problems of the world. They have done extensive studies on increasing the top marginal tax rates and how it effects revenues. What they found is, every time (in modern history) we've raised the top marginal tax rates it has resulted in a decrease of revenue as compared to GDP. Subsequently, every time we've lowered the top marginal rates, we've experienced an increase in revenues as compared to GDP.
No, the problem is, you've been immersed in Socialist kool-aid for too long and it's making you talk crazy. Competition? What the hell are you talking about? People who are making $10m a year aren't competing with others who want to be making $10m but can't because all the money is being made.
You've very modestly offered "1%" up as a proposed increase... much more 'conservative' than ANY of your liberal counterparts who have talked about 10%, 20%, 40%, 60% increases. But let's just stick with your 1%... that puts the top marginals at 40.6% tax rate on their earned incomes. Of course, there would be many who would not be effected and would just pay the tax. But there will also be a certain number who will look at this and say... Hey, I can move my operations to Mexico and only have to pay 35%. --Bye-bye jobs, bye-bye tax revenues. Or maybe they say... Hey, you know our CEO is going to get zapped by that new tax rate, so why don't we renegotiate his contract to pay him a salary of $9.9 million plus a condo in the Caymans? You see... there's always a way to get around an income tax rate for people like this. And they are really smart about it as well. They are basically two steps ahead of any liberal with a tax idea.
Finally, let me talk about a real life example. I don't know anyone who makes $10m a year... wish I did! I do know that Nick Saban makes $5m a year to coach the Alabama football team. So let's apply this tax increase idea to his earned income. Bottom line, it will result in less money going into Nick Saban's pocket at the end of the day. At some point Saban says... "Ya know what? This ain't worth it anymore! I'm tired of working my ass off and all my money going to pay my tax bill.... I'm going fishing!" I mean, the guy has wealth, money is not the issue, it's the principle of the matter. And yes, there would be another coach at Alabama... he wouldn't be Saban and he wouldn't be earning $5m a year.