Why soaking the rich doesnt work

The Committee for a Responsible Federal Budget did the math back in So maybe the goal ought to be more modest — say, reducing the deficit to about 2. You could come up with different ways to define wealth, making more people subject to the top tier of taxes, or to do away with many loopholes and deductions.

You would still have to spread tax increases around to all Americans to make the books balance. Plus, you would have to raise corporate income taxes, the payroll taxes used primarily for Social Security and Medicare and a host of other things taxes on cigarettes, gasoline, estates, etc. You could tax net worth over a certain amount, getting at the rich from a different angle.

Social Security trust fund administrators recently said the fund will run dry in , a year earlier than they predicted a year ago. Medicare Part A, which covers hospital care for the elderly, will spend its reserves by Opinion Read the Latest.

By Arthur Laffer and Stephen Moore. To Read the Full Story. Subscribe Sign In. Continue reading your article with a WSJ membership. The end of the wealth tax will probably be a similar story. That means the U. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion. Are you looking for a stock? Try one of these.

News Video. News Video Berman's Call. Politics News Video Article. When taxes rise on investments, less money is invested in enterprises that create jobs. That helps explain the income stagnation for the middle class during the Obama years. In the four years leading up to the recession, medium household incomes climbed more than 10 percent. Government policies play a role in other ways. Burdensome regulations and restrictions on credit have made it harder to start a business since the Great Recession, resulting in fewer job opportunities.