The Smallholder Proves Your Maximum Leader's Point.

Greetings, loyal minions. Your Maximum Leader will put on his teacher hat and direct this lesson towards his Economically challenged Minister of Agriculture.

In his post of earlier, the Smallholder claimed that the article from the Washington Post cited by your Maximum Leader states that taxes were increased on some households; and thus your Maximum Leader's assertion concerning being on the Right side of the Laffer Curve in incorrect. To be precise the Smallholder wrote:

"April, however, turned out to be a far better month than anticipated. Taxpayers were confronted with unexpected tax bills, many from capital gains and the alternative minimum tax, a parallel income tax system designed to hit the rich but that is increasingly pinching the middle class.

Huh.

So, in actuality, taxes were increased on some households.

And revenue went up.

Huh is right Smallholder. You obviously didn't understand what you just quoted.

Okay. Let's take this slowly for our agrarian bretheren. Tax rates did not change. According to the article, people were confronted by unexpected tax bills because they were richer than they were the year before. By being richer than they were last year they fall prey to the Alternative Minimum Tax. Once again: the tax rates have remained unchanged. No one had their tax rates raised. They had more income/money to tax and thus owed more.

So let us review:

In order for there to be more tax revenue to the government, personal incomes must increase. In order for personal incomes to increase people have to have good paying jobs. In order to have a good paying job, your nation has to have a healthy economy. In order to have a healthy economy, you can't tax people back to the stone age. In order to not tax people back to the stone age, you have to keep tax rates well below the confiscatory level.

The whole premise behind Supply-Side Economics is that if you cut tax rates you encourage economic growth. By encouraging growth you stimulate job creation and personal wealth. When you have more wealthy people, you have higher tax revenue from a lower tax rate.

So the article your Maximum Leader quoted does support the basic Supply-Side idea.

Furthermore take a look at that line from the article that Smallholder so nicely quoted: "Taxpayers were confronted with unexpected tax bills, many from capital gains and the alternative minimum tax, a parallel income tax system designed to hit the rich but that is increasingly pinching the middle class." The Alternative Minimum Tax is increasingly pinching the middle class - although it was designed to pinch the rich. Middle class people paying capital gains taxes? Humm... What could this mean? It means that the middle class is wealthier and more savvy when it comes to investing than it was. Thus they are richer and owe more taxes - without tax rates increasing. (Something you'd think the "organic" collectivist Smallholder would like.)

By the way... A post for another time might be how Congress will have to examine the Alternative Minimum Tax and Capital Gains Taxes before they do serious economic damage to the middle class.

Now loyal minions, your Maximum Leader would gladly admit when he is wrong. But in this case, as with so many others, he is not wrong; but the poor Smallholder (who is still smarting from Sadie's spurning) is wrong.

Carry on.