There has been much said about taxing the super-rich, presumably on their income rather than assets. A suggested super-rich income is more than $175 million per year. How many people make this much?
Let’s assume that there are 1,000 in this category with a combined income of $175 billion per year. Tax these folks at 100 percent of their income. This will reduce the annual deficit at current rates by about 12 percent. The debt is likely to increase since we have an increase in the debt limit which the government will not allow to go to waste. How likely is the scenario to play out?
The super-rich measured by income will not stand idly by even if taxed at more nominal rates. They will find ways to avoid paying taxes by various methods to reduce their taxable income by working less, retiring, liquidating their business, shipping jobs overseas, downsizing and so on.
We can be sure that the net effect of substantially raising taxes on the super-rich annual income will have the net effect (as history reveals) in less taxation dollars to the government.
The better approach is to allow the likes of Warren Buffet to spend their money directly on various beneficial activities of their own choosing which will be much more efficient and cost-effective than any government agency.