A work disincentive

July 29, 2009 

Gov. Beverly Perdue as well as Chris Fitzsimon (July 24 Op-ed article, "Getting revenue-raising wrong") think linearly about taxes. That is, they believe that if taxes increase, tax revenues will rise; likewise, decreasing taxes will lower tax revenue. However, this is not necessarily the case.

Altering the tax rate changes incentives. Taxes discourage the very activity that is taxed. Taxes on income discourage work. This is especially true among the wealthy who do not need to work in order to survive.

If the wealthy work less, what will happen to government revenue? Perhaps the governor should instead think about lowering the tax rate among the wealthy to raise revenue for the state. Students of history know that raising taxes on the wealthy during the Great Depression was a failing strategy.

Kelly Markson


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