I have been wanting to explain to simple-minded people why taxing the rich never works for a long time. Please share with your friends who think taxing the rich works.

Yesterday AOC made a big splash with her Tax The Rich dress at a rich person event. I will not go into the idiocy of the event or her dress. I want to discuss the facts.

First, how do I know what I know? I have been both an employee and a business owner. I see it from both sides. Every dollar I made as an employee came out of someone else’s pocket, business owner(s) or taxpayer. I traded my time for someone else’s money. Conversely, when I started my own business I traded my money for someone else’s time. It is just that simple.

If you have never owned a business please put yourself in the position of a business owner to see this clearly. If the government takes more money from me what is the natural reaction? Again, it is simple. I have several choices:

  1. Absorb the cost myself.
  2. Cancel raises for employees until I am making as much as I was before the tax increase.
  3. Higher fewer employees or fire some and work the ones I have harder.
  4. Pass the extra cost off to those who purchase my goods or services.
  5. If possible move my business to a more tax-friendly country.

Notice 4 of the 5 negatively affect the lower and middle-class people. Taxing the rich is actually a tax on the lower and middle-class. How many business owners do you think will pick option 1 above? A business owner might absorb it for a little while. Sooner or later the business owner will feel the pinch and move to one of the other options.

Now that is simple enough for AOC or any Socialist to understand. 


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