Obama's Tax Falsehoods | Richard W. Rahn | Cato Institute: Commentary

Obama's Tax Falsehoods | Richard W. Rahn | Cato Institute: Commentary: 'Many on the political left are quick to recognize that tax rates affect behavior when applied to behaviors they do not like, such as smoking. They want to have high taxes on certain foods, such as candy, drinks containing sugar, and transfats, to discourage their use. But when it comes to labor and capital, those on the left often argue that those taxes have little effect on the willingness of people to work or invest in productive enterprises, despite both the empirical evidence and good economic theory. To quote Mr. Entin, who has studied and modeled the effects of taxes for more than 30 years, "Higher marginal tax rates on any group, especially those already paying the highest marginal rates, would reduce GDP [gross domestic product] and income across the board, and not just on the people paying the initial tax bill. Increasing the double taxation on corporate income by raising tax rates on capital gains and dividends would dramatically reduce capital formation and wages, and would not raise the expected revenue."'