Why Washington’s Tax on the Rich Failed
4th November 2010
The measure, known as Initiative 1098, went down in flames, with nearly two-thirds of voters against. The ballot measure would have taxed individuals earning more than $200,000 a year or households earning more than $400,000, but cut property taxes and taxes on small businesses. The money raised was to go to schools and health care.
Most people appreciate that when rich people call for higher taxes, there’s some motivation behind it other than increasing government revenue. After all, there’s nothing preventing a rich person who thinks his taxes are too low from just writing a check to the government. No, what they really want is to keep people who aren’t rich already from becoming rich, as they did. After all, of you tax Bill Gates Sr at 50%, or even 90%, he’s still rich; but somebody who’s doing well with his own small business can’t absorb that kind of hit.
The death tax (which Bill Gates Sr famously also supports) operates on the same principles; Really Rich People can afford accountants and tax lawyers that will avoid most of it; a well-to-do farmer or small business owner can’t afford that kind of expertise, so that even if they fight off the IRS vultures during their lifetimes they won’t be able to pass what they’ve earned on to their kids.
So when you hear rich people advocate tax hikes, or bad-mouth tax cuts, ask yourself why this guy isn’t just giving more money to the government voluntarily, rather than calling for increased burdens on everybody. (Yeah, I’m looking at you, Bill Clinton.)