Today on Uncommon Knowledge, Hoover fellow and author Thomas Sowell provides proof that “tax cuts for the rich” can fill government coffers.
“The rich not only paid more taxes after the ‘tax cuts for the rich’ as they call it, they paid a higher percentage of all taxes. This started back in the 1920s, in the early 20s the tax rate on the top incomes was 73 percent. The people making over $100,000.00 paid like 30 percent of all taxes. By the end of the decade the tax rate on the top had been cut to 24 percent. People making over $100,000.00 now paid 65 percent of all taxes, and the reason is quite simple: when you have the tax rate at 73 percent people simply don’t pay it. They put their money into tax-exempt securities and rearrange their financial affairs. So what we’re really talking about is, Do you want a symbolic higher tax rate on the high-income people to win votes politically, which the rich themselves are not going to pay, or do you really want more tax revenue coming into the government?”