This week, Megan wrote one of the better blog essays on taxes. I worry less about moving to the wrong side of the Laffer Curve than I worry about the downstream effects of taxing “the rich”. When you raise taxes on “the rich”, then “the rich” have less to spend and invest, both of which have effects on the “average guy”. When “the rich” consume less, less must be produced and fewer workers are needed. When “the rich” have less to invest, less capital is available and the cost of capital rises, meaning that fewer new jobs are created. Senator Obama’s plans to dramatically increase taxes on “the rich” will inconvenience them, but will also cause some real hardship for some of the not so rich.
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