#1 History Lesson for the Libtards: "You Can't tax the Rich"
09-16-2011, 08:43 AMThomas Sowell
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- Southwest Michigan (in Exile)
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September 15, 2011 12:00 A.M.
You Can’t Tax the Rich
They’ll flee the country before you can.
Ninety years ago — in 1921 — federal income-tax policies reached an absurdity that many people today seem to want to repeat. Those who believe in high taxes on “the rich” got their way. The tax rate on people in the top income bracket was 73 percent in 1921. On the other hand, the rich also got their way: They didn’t actually pay those taxes.
The number of people with taxable incomes of $300,000 a year or more — equivalent to far more than $1 million in today’s money — declined from over 1,000 people in 1916 to fewer than 300 in 1921. Were the rich all going broke?It might look that way. More than four-fifths of the total taxable income earned by people making $300,000 a year and up vanished into thin air. So did the tax revenues that the government hoped to collect with high tax rates on the top incomes.
What happened was no mystery to Secretary of the Treasury Andrew Mellon. He pointed out that vast amounts of money that might have been invested in the economy were instead being invested in tax-exempt securities, such as municipal bonds.
Secretary Mellon estimated that the amount of money invested in tax-exempt securities had nearly tripled in a decade. The amount of this money that the tax collector couldn’t touch was larger than the federal government’s annual budget and nearly half as large as the national debt. Big bucks went into hiding.
Mellon highlighted the absurdity of this situation: “It is incredible that a system of taxation which permits a man with an income of $1,000,000 a year to pay not one cent to the support of his Government should remain unaltered.”One of Mellon’s first acts as secretary was to ask Congress to end tax exemptions for municipal bonds and other securities. But Congress was not about to set off a political firestorm by doing that.
Mellon’s Plan B was to cut the top income-tax rate, in order to lure money out of tax-exempt securities and back into the economy, where increased economic activity would generate more tax revenue for the government. Congress also resisted this, using arguments that are virtually unchanged to this day — that these would just be “tax cuts for the rich.”
What makes all this history so relevant today is that the same economic assumptions and political arguments that produced the absurdities of 1921 are still going strong in 2011."Should I keep back my opinions at such a time, through fear of giving offense, I should consider myself as guilty of treason towards my country, and of an act of disloyalty toward the Majesty of Heaven, which I revere above all earthly kings..." Patrick Henry
09-16-2011, 12:14 PM
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(16 December 1863 in Madrid, Spain – 26 September 1952 in Rome, Italy), was a philosopher, essayist poet and novelist.
Fanaticism consists in redoubling your efforts when you have forgotten your aim.
Progress, far from consisting in change, depends on retentiveness..... When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual.... Those who cannot remember the past are condemned to repeat it.
The highest form of vanity is love of fame.
The human race, in its intellectual life, is organized like the bees: the masculine soul is a worker, sexually atrophied, and essentially dedicated to impersonal and universal arts; the feminine is a queen, infinitely fertile, omnipresent in its brooding industry, but passive and abounding in intuitions without method and passions without justice.
Experience has repeatedly confirmed that well-known maxim of Bacon's that "a little philosophy inclineth a man's mind to atheism, but depth in philosophy bringeth men's minds about to religion." At the same time, when Bacon penned that sage epigram... he forgot to add that the God to whom depth in philosophy brings back men's minds is far from being the same from whom a little philosophy estranges them.
Matters of religion should never be matters of controversy. We neither argue with a lover about his taste, nor condemn him, if we are just, for knowing so human a passion.
Fashion is something barbarous, for it produces innovation without reason and imitation without benefit.
Happiness is the only sanction of life; where happiness fails, existence remains a mad and lamentable experiment.
History is nothing but assisted and recorded memory.
It might almost be said to be no science at all, if memory and faith in memory were not what science necessarily rest on. In order to sift evidence we must rely on some witness, and we must trust experience before we proceed to expand it...... The line between what is known scientifically and what has to be assumed in order to support knowledge is impossible to draw............ Memory itself is an internal rumour; and when to this hearsay within the mind we add the falsified echoes that reach us from others, we have but a shifting and unseizable basis to build upon........... The picture we frame of the past changes continually and grows every day less similar to the original experience which it purports to describe.
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