Raising taxes never resolves a government debt nor eases its deficit.
No matter how much revenue the federal government receives it will always spend more.
France is trying. The new socialist president, François Hollande, has decided to ease his nation's financial woes by soaking the rich. Those earning over $1.23 million a year be taxed at a 75 percent rate.
The inherent problem with Hollande's plan is that, in short order, there were be no more Frenchmen earning $1.23 million per year. Some will leave the country. Some will simply suffer the loss. Either way, tapping into the personal income of the productive class is doomed to failure. It's temporary at best.
Those who voted for Hollande (many did not) fail to understand that when a government taxes the rich it simultaneously taxes the nation's economy. Private sectors are always more efficient distributors of wealth in free market economies than governments. It's like digging a hole to acquire dirt to fill a hole.
What Hollande is doing in France is what Obama wants to do in America.
As noted in previous posts, there are only two levers for any economy, be it a business, household or government. The first is increased income and the second is decreased expense. Liberals only recognize one lever: increased income.
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