Tuesday, March 03, 2009
A Look at Past Bad Taxes on the "Rich"
"I've put thought into how to get under $250,000," said Poczatek. "It would mean working fewer days which means having fewer employees, seeing fewer patients and taking time off."Of course, there will be the accompanying loss of service to patients and the loss of jobs to medical office personnel. A health care crisis could ensue as the motivation and reward for working long hard hours, plus the years of extra schooling and training to get there, are removed. The same will happen in many other professional and business areas.
"Generally it means being less productive," she said.
"The motivation for a lot of people like me – dentists, entrepreneurs, lawyers – is that the more you work the more money you make," said Poczatek. "But if I'm going to be working just to give it back to the government -- it's de-motivating and demoralizing."
One of the advantages of being older is remembering things younger persons never heard of. In 1990, a federal luxury tax on yachts was imposed. The result?
about 100 builders of luxury boats -- recreational craft costing more than $100,000 -- cut their operations severely and laid off thousands of workers. Some builders filed for protection from creditors under Chapter 11 of the Federal Bankruptcy Code.If it hadn't been for foreign sales the result would have been worse.
Overall employment in the industry, including the makers of smaller, less-expensive boats, has dropped to 400,000, from 600,000 in 1988.
Currently, in Bali a luxury tax on imported food and drink is wreaking economic havoc.
There is little doubt, according to the PHRI executive that the high cost of liquor is costing Indonesia tourism traffic.Poor tax policy and unintended consequences, not a good combination.
The Fair Tax would avoid these pitfalls. But the bottom line is government needs to become fiscally responsible. The taxpayers are not shmoos.
I remember the luxury boat tax too.
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