UK's Fair Share Experience

The President and the First Lady are running around the country trying to sell the old canard that we must make The Rich pay their Fair Share of income tax by raising marginal tax rates. Fortunately we have a very recent glimpse into what happens when you do this. One of the last gasp acts of the Labor government in the UK was to do exactly what Barack and Michele are asking for. They raised the highest marginal tax rate from 40% to 50% on The Filthy Rich (anyone earning £150,000 a year). What happened? Tax collections from the group affected by this rate increase are actually down 5%.

Now this probably will neither shock nor bother the President. Raising revenue isn't his objective. Appearing to mete out punishment to the successful is. He admitted this four years ago to Charlie Gibson of ABC in talking about raising capital gains taxes:

GIBSON: And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down.
So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?
OBAMA: Well, Charlie, what I've said is that I would look at raising the capital gains tax for purposes of fairness. 

In other words, an increasing budget deficit is not a problem if you can pander to the ignorant who think raising marginal tax rates is "fair". The phrase "Cutting off the nose to spite the face" comes to mind here.

This passes for leadership these days.