Hands Out

clipped from www.forbes.com In a 1924 speech before the National Republican Club, President Calvin Coolidge observed "that when the taxation of large incomes is excessive, they tend to disappear." Coolidge found that in 1916, 206 people had incomes of $1,000,000 or more, but once a higher tax rate on million-dollar incomes was passed, the number dwindled--falling all the way to 21 in 1921. The answer to all of this is very simple, however. If we want the government off of our backs, we must also get our hands out of its pocket. This means we must be ready to give up the various deductions that we've grown accustomed to in order to get the marginal tax rates on our income reduced. Until then, we shouldn't be fooled by the ongoing tax debate in Washington. So long as the discussion centers around minor changes to marginal rates, we can know that, whether they go higher or lower, the headline numbers will be a sideshow relative to the various favors given in order to reduce what we pay.