It's encouraging to hear that our new Governor appreciates (or at least pretends to appreciate) the crippling effect taxation has on those highest-earners in the state - the very people who drive economic activity by not hording all of their money. But still, it's not enough to stop the increase of the top marginal tax rate, that rate must be dropped - and quickly, lest the tenuous economic recovery falter.
But how far to drop the rate? Should it drop to 15%? To 10%? To 5%?
It's the most simple economic mechanics that the less money the top wage earners pay in taxes, the better off everyone is. In fact, the economic stimulation will cause the state's coffers to fill from the increased revenue. Indeed, anyone who tells you otherwise - or that economics is, at its core, any more complicated than this, is spinning long-discredited Keynesian nonsense we outgrew in the Reagan era.
That's why, if the Governor is serious, he should be discussing dropping the top marginal rates to at least negative 25%. Actually paying out tax money to the richest Vermonters can easily be accomodated by a revenue shift to the middle and working class, and by a supplemental fee assessed on income of all union members of 50%. This wouldn't be a tax increase, obviously. Because it's a fee.
Does anyone really think Senator Shumlin has the political courage to buck his liberal allies and do what's right?
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