Ever notice what happens the week after someone wins the Powerball jackpot and the prize gets reduced? The number of people trying to win it decreases dramatically, even though the odds of winning haven't changed a bit.
State governments long ago figured out this aspect of human behavior. That's why you won't see them advertising "We're reducing the size of the jackpot if you win!" Yet that's exactly what the Obama Administration is doing. They are shouting as loudly as they can their determination to reduce the size of the jackpot for entrepreneurs that manage to create a profitable business. "If you create a small business that earns more than $200,000, we'll raise your taxes!" is the President's mantra. And if that doesn't motivate you enough, he promises to tour the country giving speeches demonizing you.
Economic growth and employment are dependent on entrepreneurs and the investors that back them taking big risks to create successful new businesses. The smaller the jackpot, the fewer people you will have risking their time and money to buy a ticket. It's possible that reducing the payoff for success makes good politics, but it's really bad economics.
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