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There Aren’t Enough Millionaires
The rich can’t fund our deficits.


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Kevin D. Williamson

Correction: You can try to tax the striped pants off of them. Lloyd Blankfein and Tiger Woods and Charlie Sheen have a lot of discretion about when, where, and how they get paid. Lloyd Blankfein does not look at a pay stub every two weeks and shake his head sadly, and make sad little sighing sounds; guys like that do something about it. They move to low-tax jurisdictions. They defer. They incorporate. They set up enormous trusts to keep their ne’er-do-well nephews in boat shoes and gin and political office while avoiding taxes. They lawyer up. They will play the game, and they are better at it than you are.

So, how about taxing people who make less than $250,000? That’s probably whom you want to tax, since they are the ones who have the money (Counterintuitive, I know.) The Bush “tax cuts for the rich” cost the Treasury about $800 billion in forgone revenue; the Bush tax cuts for the middle class cost trillions – 2.2 of them, to be precise.

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Repealing all of those Bush tax cuts, for rich and middle class alike, gets you about $3 trillion — over ten years. The deficit is running from a third to almost half that every year. Will not balance. Does not compute.

Just as supply-siders are naïve to think that tax cuts are going to magically empower us to grow our way out of this mess, progressives are naïve to think that there is some magically delicious pot of Lucky Charms at the end of the IRS rainbow that is going to get us out of this in some kind of obvious or straightforward fashion. No, tax cuts do not pay for themselves, but supply-side effects are real things, and jacking up tax rates to the level necessary to sustain current levels of government spending is going to have real economic consequences, some of which could in aggregate mean that you don’t collect the taxes you thought you were going to collect. This is doubly true when you already have the second-highest business-tax rate in the developed world and other significant economic challenges, like a backward K–12 education system making the work force less competitive and public infrastructure that is being neglected in favor of gimmicky political shenanigans.

Capital is sensitive — it just wants to be loved! — and it will go where the love is, where it can be fruitful and multiply. Setting trillions of dollars’ worth of it ablaze on the altar of Washington’s self-importance every year is not going to get it done, and there simply aren’t enough rich people for us to pillage or enough loot to make it all work. We have finally, as the lady predicted, run out of other people’s money.

— Kevin D. Williamson is a deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialismjust published by Regnery. You can buy an autographed copy through National Review Online here.



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