Ghosts of Luxury taxes past
Will liberals learn the lessons of past tax failures?
JoeUser Forums
In answer to my sub-title above, the magic 8 ball says 'Not likely.'
In anycase, today's issue of The Washington Times has an excellent piece in the 'Inside Politics' column. Note that the link for the item snipped below may be time/date sensitive so I'm including a fair amount here so you get the point of the piece. Please try to check out the entire column though so you can catch the original information in complete context.
Inside Politics column - August 6, 2007:
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Luxury-tax ghost "Back in the hot summer of 1990, Senate Majority Leader George Mitchell proudly engineered the infamous 'luxury tax,' a nasty little tithe on everything from furs to jewelry to yachts," Wall Street Journal columnist Kimberley A. Strassel writes. "Democrats were proud: Not only were they throwing new dollars at the Treasury, they'd done it by socking it to the rich. The wealthy, in the words of then-House Majority Leader Dick Gephardt, would finally pay 'their fair share.' "Within a year, Mr. Mitchell was back in the Senate passionately demanding an end to the same dreaded luxury tax. The levy had devastated his home state of Maine's boat-building business, throwing yard workers, managers and salesmen out of jobs. The luxury tax was repealed by 1993, though by the look of today's tax debate, its lessons haven't been forgotten. Top Democrats are working to implement a new class-warfare tax strategy, only this time they're getting pushback from those in their party who fear the economic consequences. "Nancy Pelosi and Harry Reid, for their part, are steaming ahead with a plan ripped straight out of Mr. Mitchell's 1990 playbook. They're sitting atop years of pent-up spending demand that is now starting to bust free. Their liberal members want to give more money to gentleman farmers, take credit for expanding health insurance for 'the children,' and write checks to all those struggling renewable energy titans, like Archer Daniels Midland." |
Yup, I would say that the Democrats seem destined not to learn from their failures of the past, no matter how long ago, or even how recently they may have seen examples that prove their methods wrong.
Consider, if you will, that the Bush tax cuts -- those same tax-cuts that a certain Clueless individual here at JoeUser.com would have you believe ruined the economy and the future for all U.S. citizens -- wound up feeding much revenue into the federal coffers once they were enacted. Time and again it has been shown -- even by a President with the last name Kennedy -- that cutting taxes returns more revenue than is ever assumed to be lost via those cuts, and yet time and again the Democrats line up looking for new ways to raise taxes and implement class war-fare so that their minions will line up behind them with the pitchforks ready to take away from the rich and give back to, well, nobody.
Huh? Give back to nobody did I say? Uh, yes. Yes, I did. Give back to nobody because the revenues just aren't there to get. Well, perhaps they are, but they wind up not really being there because as soon as there is even a whiff of a tax increase on luxury items, and/or on the wealthy, they change their habits and suck their money out of the economy to sit on waiting for long-term gains and the eventual tax-cuts they know will come from future administrations and congresses that are smart enough and/or desperate enough to loosen the reigns on the money and let it all start flowing back out into the economy.
As the clipping above notes, during the last round of luxury taxes, the taxes that were levied wound up collecting almost nothing for the government because people simply changed their buying habits. They delayed purchases, or bought used items that helped them avoid paying the luxury tax at all. And the government sat back waiting for revenue to come in that just didn't. In the end, those luxury taxes may have done more to raise the deficit than even a tiny fraction of the Bush tax-cuts ever could hope to (consider the compounded interest on the money that was never collected, and yet still spent when we were deficit spending back in 1993. Add inflation on top of that and you realize that the lost revenue that we could have had if the tax rates had been left alone, or better yet, if we had cut capital gains taxes and let more money flow into the economy, is not an insignificant amount).
There are still no shortage of liberals ready to line-up in absolute support of raising taxes on the wealthy though. It's like the town mob that congegrates around the fire about to go off and burn the witches at the stake. Soak the rich, soak the rich, soak the rich! Yup, they follow like the mob and go off looking for the rich targets to get the money from. Unfortunately they fail to realize that as they carry their torches and light the fires, they just burned up the money with the victim and will likely have neither around when all is said and done.
