Quote:
This is why I avoid the WSJ editorial page.
The ideology over reality ratio is way too high.
It gives an example that shows that tax collections will fall if tax rates are raised. Based on "models".
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All you anti-supply-siders need to actually read what the article said instead of what you expected it to say.
The articel quite properly states that Taxable Income will fall if tax rates are raised. Not so much as to create a net reduction in government receipts, but certainly enough to prevent Obama from achieving his projections.
Any given tax dodge, whether it's municpal bonds, contibuting to one's 401-k, hiring one's worthless nephew, or just plain not working, has costs. Just as alternative energy becomes more attractive as gas prices go up, previously non-cost-effective tax dodges look more attractive as tax rates go up. Thus the summary comment that the net effect would be that the government would indeed gain revenue, but every dollar gained would be at the expense of roughly $5 of private sector productivity, which hardly sounds like a good deal for anybody not in the governmental extortion business.