READ ON: 4. Is progressive taxation based upon misconceptions as to the reality of the incidence of the tax burden? Whatever the political intent, constructive or punitive, it would appear that the effect of the high marginal progressive rates of taxation on both human and intellectual capital is not as intended. The evidence strongly suggests that the real income effects of high marginal taxation of financial and intellectual capital have resulted in lower real after-tax income for all Americans, and that more proportionate taxation should be adopted to promote economic efficiency�with equity of income distribution left to the impartial judgment of the markets. NOT A RIGHT WING PUBLICATION(Institution for Public INNOVATION)
Conclusions for Public Policy Given that increasing the share of taxes paid by the wealthy does not increase the after-tax income of the remainder of the people, then serious reexamination of public policy is necessary.We are paying a high price for high marginal tax rates that limit domestic capital formation and income growth.Where are the offsetting benefits? What are the real costs incurred by punishing the productive and subsidizing the unproductive? What unwholesome behavioral and demographic trends are being promoted? Is the cruelest consequence an increasing tax wedge on financial and intellectual wealth whose cost is primarily borne by workers and consumers through lost jobs, lower incomes, and higher prices? The fact that the hollowed institution of progressive taxation has not redistributed income cannot be ignored. The federal collection of progressive income taxes has corrupted definitions of the law and equity, and few will question that to a greater or lesser degree it is economically inefficient. It would seem that if it worsens rather than decreases disparity of income distribution, then only one realistic conclusion could follow: Progressive taxation for income redistribution has achieved the opposite of its objectives of helping persons of lesser means.