Example No. 10,742 that raising the top marginal income tax rate does not raise any new revenue to the government

From the Telegraph:

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.

This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.

The figures have been seized upon by the Conservatives to claim that increasing the highest rate of tax actually led to a loss in revenues for the Government.

It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.

George Osborne, the Chancellor, announced in the Budget earlier this year that the 50p top rate will be reduced to 45p from next April.

Since the announcement, the number of people declaring annual incomes of more than £1 million has risen to 10,000.

However, the number of million-pound earners is still far below the level recorded even at the height of the recession and financial crisis.

Last night, Harriet Baldwin, the Conservative MP who uncovered the latest figures, said: “Labour’s ideological tax hike led to a tax cull of millionaires.

Far from raising funds, it actually cost the UK £7 billion in lost tax revenue.

Politicians aren’t so ignorant they don’t know this.  They know raising the top rate on the “rich” won’t bring in more revenue.  So if it’s not about revenue, what is it about?  It’s about “taxing the rich!” In other words, it’s political theater and demagoguery by evil little men (and a few like-minded women) consumed by maintaining and increasing their power (power they use to make themselves wealthy*).  When Obama was asked if he thought a tax rate increase should occur even if it wouldn’t bring in any additional revenue he answered yes, as a matter of “fairness.”

Fairness is like beauty, it’s in the eye of the beholder.  Fairness for Obama is having low-information voters bound to him because they think he is “getting even” with “rich” people for them.

The “rich” is constantly being redefined as to who that includes.  Presently the political class has defined it down to include anyone making over $250,000 a year. This grabs thousands of small business owners who work hard each day to run their business, meet their employee payroll and stay afloat in the Obama economy.  There aren’t many places left in America where that level of income is going to make anyone rich by any sensible definition of the term.

*Obama’s net worth was $4 million in 2008 when he ran for President.  I be surprised if it isn’t at least 3 times that by now.  Bill Clinton never earned more that $30,000 a year before he became President. His current net worth is over $100 million.  He loves to talk about that. Not bad for two guys neither of whom has ever held a real job.

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