Economists disagree about a lot of things, but there is one basic law of economics that is pretty much the foundation for all others:  People respond to incentives.

We all know that incentives work.  Some incentives are positive, some are negative.  Any parent knows that there are two basic ways to affect children’s behavior.  You either reward them when they do something good, like wash the dishes, or you punish them if they do something bad, like staying out after curfew.

Now it seems like our country is determined to raise taxes on the rich.  The goal is to get more revenue by socking it to the rich, who have more than enough.  If that actually worked, it would appeal even to me.  After all, I certainly don’t qualify as rich.  But the problem is that we are actually taxing success.  Sometimes, when you tax success, the only result is less success.  That appears to have happened in Great Britain.  They raised taxes on millionaires and now they have about half as many millionaires.

Some of them just moved out of England.  Perhaps that explains why so many obnoxious liberals with British accents now live in the U.S.  Others don’t appear to have moved, but they are reporting less income.  It is hard to tell if this is because these millionaires are no longer millionaires or they just stopped declaring income.  Either way, if the intent was to raise more tax revenue, it failed miserably.  England actually lost tax revenue with this brilliant strategy.

Sometimes if you are successful in taxing success, you succeed only in getting less success.

TDM