Most americans seem to think that making more money equates to paying more taxes. When you deal with reality, you see this is far from the truth. How many of you are paying on your 401k's when they go up. Theoretically you are wealthier, but you will not pay taxes on it. But, I would guarantee that if they reduced the penalty and made the tax burden of taking it out very low, say 5%, many people would cash out their 401k'st and spend the money. They would be paying more taxes while, in reality, becoming less wealthier. The economy could go up while the masses were becoming poorer. This was pretty much the definition of what happened in the USA. Interest rates dropped, people borrowed more against their homes spent the money on garbage, and while the economy appeared to soar, the middle class just got further in debt.

In trickle down economy theory, the rich also accumulate wealth with out taxation. By lowering the rate, you get more spending. I know for a fact that this works in many different ways.

For example, investors I have worked with will consider buying something through a tax deferred exchange. This provides me with work and income and for the government excise tax and other fees. It also helps the wealthier get richer by reinvesting their money into better and more profitable ventures. The alternative, is for the money to stay where it is. Sure there may be some taxation through any active income associated with the project, but the passive growth income grows fully intact and the economy lacks the movement of this capital. In the same way, when taxes are 40% or higher, it becomes a lot more sensible to allow passive income to grow and collect the lower taxable returns on investment than investing in projects with higher returns. As the rates of taxation goes up, alternative means of compensation will also go way up, there by lowering taxes. For example, going back to the 401k, it becomes a bigger incentive to invest in one if taxes on the money are 40% then if the taxes are 5%.
Imagine then, if the taxes were 80 or 90%. How many of you would invest in your tax free investments if the alternative was $100 growing or $10 now. For the rich, the ways of hiding the income are all over. From foreign investments, to buying corporate retreats, providing company cars or vacations, remodeling the offices, more lavish pensions, stock options, and much, much more.

The only real question, is when and where different effects occur and how best to maximize on these. By no means do I think the system works as is, but raising taxes in general will only hurt the masses.

Taking a true right wing stance, I think reducing government action will have a much greater impact than almost anything else. Most people think that regulations hurt the companies in which they are put on, but in reality they usually help the most established. Take Todd's business. Lets say tomorrow the goverment requires 100% lead free lures and a guarantee on each product. Suddenly, it becomes harder for the little guy to meet these requirements. The big guys will yell too, but in the end since I know I will not stop fishing, what will happen is the big guys will have the sources to adapt, while small guys like Todd get pushed out of the business. Over and over it is happening. When I started doing what I am now, I took a 30 hour class over 4 days and on that Saturday took a class and was certified. Now it takes a test that I doubt I could pass, 90 hours of classes, and 1 year of supervision. For me, this is great, why not make it a fully 4 year degree.

Liberals don't get it because most live in a fantasy world. Like the car I say a few years back said along with all its pro-obama bumper stickers--"I believe in fairies"