Let Me See If I Understand This Correctly...

...so when a tax authority raises confiscatory tax rates to an absurdly high level, say 50%, it actually causes the opposite effect of it's intent? Tax revenues realized actually flatten or are reduced because the excessive taxes skew the risk/reward quotient for business and investment activities. In addition, people are given great incentive to conceal income (legally and illegally), reduce business activities or relocate altogether.

Now England is cited in the article. And although Obama's 2013 budget hasn't a snowball's chance in Hell of passing either the House or Senate, it does call for the same catastrophically failed tax logic as the Brit's version, with a 44.8% assault on dividend income.

England:

http://www.telegraph.co.uk/finance/...9/50p-tax-rate-failing-to-boost-revenues.html

Obama's dividend tax plan:

http://online.wsj.com/article/SB100...25493025537660.html?mod=WSJ_hp_LEFTTopStories

I'm sure falling revenues having nothing to do with the recession. It is exactly as simple as you project. Higher taxes = less revenue. It's really that simple. Economics aren't complicated at all. Why are you not already a Professor of Economics, anyway?

He IS a professor of economics, sin papeles.

So dumb-and-dumber agree with a 50% tax rate...makes perfect sense.

That's exactly what I said. An English professor AND an Economics professor! A true Renaissance man!

Here's a few dumbed-down (perfect for you) explanations of the relationship between tax rates and tax revenues. Get your crayons ready to take notes:

The Laffer Curve:



http://www.youtube.com/watch?v=fIqyCpCPrvU

Let me see if I understand you correctly: U.S. falling revenues are due to the recession, and have nothing to do with the Bush Tax Cuts, is that right?

I'm not saying that, either. I merely pointed out that the original analysis was flawed due to its hilarious simplicity. Falling revenues are due to a variety of reasons. Not all of them are controllable. But anytime someone points to a single reason it's happening and blames a single party, I feel pretty confident they're wrong.

I think the tax cuts have certainly contributed. So has the recession. So has cheap labor overseas. So has an overly complex tax code. There are probably hundreds, if not thousands of reasons.

Good to see you mustering a nice dose of respect for your fellow human beings as per usual.

I think we are in agreement, but let me ask you this:

Do you think it's a good idea to raise taxes on anyone during a recession? Are we still in a recession?

I know the definition of a recession. However, I don't agree with the concept that deficits should be added to the GDP. If I borrow money, I am NOT richer. Plain and simple. Devaluation of the dollar is a hidden Tax on everyone.

Good to see you were able to learn something from Art Laffer.