Jet Levy Will Put Workers Up in the Err | Michael D. Tanner | Cato Institute: Commentary

Jet Levy Will Put Workers Up in the Err | Michael D. Tanner | Cato Institute: Commentary: "Yachts were, after all, owned by 'millionaires and billionaires' who didn't pay their fair share of taxes. Who could object to taxing them a bit more? So Congress passed a 10 percent luxury tax on yachts priced at more than $100,000.

The result was the virtual destruction of the domestic boat-building industry. Sales of luxury boats dropped 70 percent within a year. Several manufacturers went bankrupt. More than 25,000 workers lost their jobs. And because so few boats were sold, the tax didn't even generate much new revenue.

At the end of the day, the millionaires and billionaires were still rich. But thousands of hardworking middle-class Americans ended up out of work. The tax was repealed by a lopsided and bipartisan vote in 1993."

"Obama assumes that if someone is wealthy, his or her money just sits there. In reality, individuals either spend that money or they save and invest it. If they spend it, it helps provide jobs for the people who make and sell whatever it is they buy. If the money is instead saved and invested it provides the capital that is needed to start businesses and hire workers.

Every dollar that the government takes in taxes (or borrows in debt for that matter) is one less dollar that someone has to spend, save or invest."