Tuesday, March 03, 2009

Upper-Income Taxpayers Look for Ways to Sidestep Obama Tax-Hike Plan


Dr. Sharon Poczatek, who runs her own dental practice in Boulder, Colo., said that she too is trying to figure out ways to get out of paying the taxes proposed in Obama's plan.

"I've put thought into how to get under $250,000," said Poczatek. "It would mean working fewer days which means having fewer employees, seeing fewer patients and taking time off."

"Generally it means being less productive," she said.

"The motivation for a lot of people like me – dentists, entrepreneurs, lawyers – is that the more you work the more money you make," said Poczatek. "But if I'm going to be working just to give it back to the government -- it's de-motivating and demoralizing."

The lefty blogs are making fun of people who apparently don't understand that it's only the marginal tax rate that affects income over $250K, meaning you still get to keep some of the money you earn past the magical quarter-of-a-million mark so there's no real reason to try to stay below it. The lefties are missing the key point: people lose the incentive to work hard when taxes go up. And when the productive people decide it's not worth it to work so hard, they cut back on their labor and everybody is worse off. They don't spend as much, they don't pay workers as much, they don't do as much. Remember, the reason they were making a lot of money is that other people found some value in what they produced.  The whole economy loses when they pull back. That's another reason that welfare is bad: it's a perverse incentive to do nothing.

As Instapundit says, a lot of us may be "going John Galt" soon.

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