THE DOW-JONES INDUSTRIAL AVERAGE since the passage of the stimulus bill. Looks like a vote of “no confidence” to me. Because of my major donor work for charities, practically everyone one on our Finance Committees is in $250K+ bracket. Many of them are Obama supporters, but they are taking steps to lower their tax footprint by such steps as maximizing 401K contributions and cutting back on overtime. Targeting the $250K+ bracket is not a new idea.
We did this with the Luxury Tax. It was a popular idea because it was suppose to only tax the rich. Before the tax North Carolina and Maine enjoyed a large yacht building industry, but within two years of the tax being passed, all those businesses were gone and people were out of good paying jobs. The rich were smart enough to figure out that a $200 plane ticket to the Bahamas to buy their yacht was much cheaper than paying the luxury tax. When you punish the productive, you get less productivity. In Denmark workers are not seeking a pay raises because they lose 70% to taxes. Instead, their preferred bonus is extra vacation time, as the government can’t claim 70% of that.