Why “Taxing the Rich” Doesn’t Make Us Better Off
The complete confiscation of all private property is tantamount to the introduction of socialism. Therefore we do not have to deal with it in an analysis of the problems of interventionism. We are concerned here only with the partial confiscation of property. Such confiscation is today attempted primarily by taxation.
The ideological motivations of such action are immaterial. The only question of interest to us is merely: What is sought by these measures and what is actually accomplished?
Let us first consider taxes which directly or indirectly affect incomes only. In all countries there is today a tendency to tax larger incomes at higher rates than smaller incomes. In the case of incomes which exceed a certain amount most countries tax away, even nominally, up to 90 percent. Methods prescribed by law for the determination of the amount of income, and the interpretation of these laws by the administering agencies, fix incomes considerably higher than could be established on the basis of sound accounting principles. If taxpayers could not avoid some taxes by using loopholes in the laws, their actual taxes would thus not infrequently exceed by far the amount of their actual incomes. But legislators try to plug these loopholes.
Popular opinion is inclined to believe that the taxing away of huge incomes does not concern the less wealthy classes. This is a fallacy. The recipients of higher incomes usually consume a smaller proportion of their incomes and save an
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