The Case against Confiscatory Tax Rates, Part I August 5, 2022 by Dan Mitchell

Back in 2009, I narrated a video about the downsides of class-warfare tax policy. But if you don’t want to spend eight minutes watching the video (or 14 minutes watching this video), here’s a visual that summarizes why high tax rates discourage people from engaging in productive behavior. The most important thing to understand is that a high marginal tax rate (i.e., the tax rate on earning more money) has a big effect on incentives to work, save, invest, and be entrepreneurial.

But how big is that effect?

<snip>

But if we want to be concise, start with this list.

• Higher tax rates on the rich will reduce capital formation.
• Higher tax rates on the rich will lower economic output.
• Higher tax rates on the rich will shrink the labor supply.
• Higher tax rates on the rich will depress levels of entrepreneurship.
• Higher tax rates on the rich will lead to lower middle-class wages.
• Higher tax rates on the rich will reduce economic mobility.
• Higher tax rates on the rich will drive away superstar inventors.
• Higher tax rates on the rich will lower levels of innovation.
• Higher tax rates on the rich will lead to higher taxes for everyone else.
• Higher tax rates on the rich will encourage tax complexity.

Heck, higher tax rates can even hurt your favorite sports team.

P.S. Joe Biden wants people to think that it’s patriotic to pay more tax, though he exempts himself with clever tax planning.

Source: The Case against Confiscatory Tax Rates, Part I | International Liberty