Sunday, October 08, 2017

Tax the rich!

I can't believe this story.  It's really true that the those who fail to learn history are condemned to repeat it.  Independent: "Emmanuel Macron to introduce new tax on expensive jewellery, supercars and luxury yachts."

Let's call this the "American Boating Employment Act of 2017."  I remember what happened to the yachting industry when Congress passed something similar here in 1991:
In 1990 there were no luxury excise taxes, all of them having been repealed in 1965. But perhaps every quarter-century or so government--it cannot help itself--must go on a "fairness" bender, the memory of the hangover from similar misadventures having faded.

In 1990 the Joint Committee on Taxation projected that the 1991 revenue yield from luxury taxes would be $31 million. It was $16.6 million. Why? Because (surprise!) the taxation changed behavior: Fewer people bought the taxed products. Demand went down when prices went up. Washington was amazed. People bought yachts overseas. Who would have thought it?

According to a study done for the Joint Economic Committee, the tax destroyed 330 jobs in jewelry manufacturing, 1,470 in the aircraft industry and 7,600 in the boating industry. The job losses cost the government a total of $24.2 million in unemployment benefits and lost income tax revenues. So the net effect of the taxes was a loss of $7.6 million in fiscal 1991, which means the government projection was off by $38.6 million. 
Didn't France just go through a painful lesson on taxing the rich?  Some people never learn.  It's just too easy and politically popular to take somebody else's money.

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