My main goal for fiscal policy is shrinking the size and scope of the federal government and lowering the burden of government spending.
One of the big obstacles to good tax policy is that many statists think that higher tax rates on the rich are a simple and easy way of financing bigger government.
I’ve tried to explain that soak-the-rich tax policies won’t workbecause upper-income taxpayers have considerable ability to change the timing, level, and composition of their income. Simply stated, when the tax rate goes up, their taxable income goes down.
And that means it’s not clear whether higher tax rates lead to more revenue or less revenue. This is the underlying principle of the Laffer Curve.
For more information, here’s a video from Prager University, narrated by UCLA Professor of Economics Tim Groseclose.
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