The Tax Threat to Prosperity

Writing today in the Wall Street Journal, Arthur Laffer has written an excellent explanation of American tax policy history, and the differing effects of tax rate cuts on high and low income earners. This analysis should not be surprising coming from the architect of the famed Laffer Curve. Rich Lowry agrees, here.

The FDC concurs with Mr. Laffer, but would like to add that if you continue the trends that he points out we will eventually have a country where many people won't be able to brag, "I'm a tax-paying American citizen and yada, yada, yada." Why? Because if current trends continue, more and more people will NOT pay income taxes. You say, "I'm not rich. Fine with me. Let them pay. They can afford it." Eventually, when the number of taxpayers who don't pay any income taxes, reaches over 50%, then the lower 50% of income earners controls the whole game - with their votes. Next, the folks that are make barely more than the top earning no tax payers also vote for whoever or whatever will get them into this tax skate club, and so on, and so on, and so on. Pretty soon the rich are paying all the taxes. Then, Atlas shrugs, and the whole house of cards collapses. Back to the drawing board.