January 23, 2010

Flight of the Golden Geese

Justin Katz

For those disinclined to understand, here's a video parable about a goose that lays golden eggs (via TaxProf):

As we're learning, in Rhode Island, the video doesn't tell the whole story. The same mentality that plagues the fictional farm affects not only the golden-egg-laying geese, but also the industrious animals that find ways to produce new things (or old things more efficiently). And not only does the farmer take more of the fruits of their labor, but he also places restrictions on their operations, while expanding the burden that must be "shared."

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Progressive taxation and regulation policies only work in a totalitarian system in which people are not free to leave. If businesses and high-income individuals had to stay in RI, then what the GA has been doing would make a lot of sense (from a certain warped perspective) since they would all have to comply with the scheme. But in the real world, instead of simply complying with burdensome new laws, businesses will just leave. Which is exactly what happened, and now we are all screwed and jobless.

Posted by: Dan at January 23, 2010 6:42 PM

I am compltely in sympathy with the video parable. Unfortunately, there are some matters which are ignored. "Golden Geese" are constantly being born. I will grant that, like real geese, they tend to be born in climates that favor them.

While this works well as a parable among states, how about the country as a whole? The 40% is true nationally, is there a place that "American geese" would prefer? I think that the American Geese are trapped, other countries would tax them even more heavily. That enables the politicians to fleece them to their hearts content. What we need is a "Fairness DOctrine" to prevent that. Perhaps that is a poor choice of words, it is American scripture that what is "fair" is "the more you make, the more you pay".

Posted by: Warrington Faust at January 24, 2010 9:49 AM


Do you really believe that the wealthy are trapped? Don't you think some country, out there in the world, would at some point see the opportunity to offer an alternative?

Of course, the internationalistas may be rushing headlong toward a global government as a preemptive measure...

Posted by: Justin Katz at January 24, 2010 5:14 PM

This video is so simple that even Pat Crowley should be able to understand it ... but won't!

Then again, he never made it through the Cliffs Notes of "Animal Farm" either.

Too busy donning duck costumes and quaking "social justice" I guess.

Posted by: Ragin' Rhode Islander at January 25, 2010 4:27 PM

The way I remember it, Reagan boosted tax revenue by lowering the tax -rate- on the 'golden geese' dramatically, which had the positive effect of dramatically increasing their wealth beyond the loss in revenues initially incurred.

The tax rate on the rich went from 70-something percent to 30-something percent, if I recall correctly. I also think that the positive economic effect of tax cuts is related to the amount of money you actually get to take home. If you're like me, middle class, probably paying 25% or so income tax, a 25% cut in taxes is only going to boost your available cash by 8-10% or so, not substantial enough to do anything transformative to the economy.

What's happened since is that the 'average' person doesn't even make enough money to hit the bracket where they start making serious contributions to their taxes. That's not a problem of taxing the rich too much, or not enough (we -all- get taxed enough!); it's a problem of a middle class that's been sliding towards peasantry for thirty years, and a government that believes deficit spending is acceptable even in flush times.

Surely this is not a blog of 'golden geese', tax cuts to that top 1%, or 5%, or 10% are going to come out of -our- pockets.

The problem with our local economy is that we're not -competitive- with our neighbors on taxes.

I'm a homeowner, I work an average 'decent' job; the taxes are high, but they aren't 'killing' me. The problem is that if they're just a shade higher than Massachusetts, they'll kill our local economy.

To be fair and balanced, I'll say that the 'right answer' isn't with the progressives either, who seem to feel that by increasing taxes -and- payouts, they can even the playing field. The wages of government workers do not 'set the example' for private industry, it should be quite the opposite.

Posted by: mangeek at January 25, 2010 11:42 PM
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