Reasons for taxing the rich: Revenue or punishment?

Why do some people support taxing higher incomes at higher percentage rates? Some politicians throughout Illinois would like you to believe it’s to generate revenue – but a recent poll suggests something different. According to a new poll conducted in the U.K., members of their center-left Labour Party were overwhelmingly supportive of taxing higher incomes...

Why do some people support taxing higher incomes at higher percentage rates? Some politicians throughout Illinois would like you to believe it’s to generate revenue – but a recent poll suggests something different.

According to a new poll conducted in the U.K., members of their center-left Labour Party were overwhelmingly supportive of taxing higher incomes at higher rates even if it brought in no new revenue to the government.

That means large portions of the population believe taxing ought to be used as a tool for fairness or a punishment of success rather than a way to generate revenue. But this belief is misguided, as punishing success does nothing but hurt the overall population.

As Calvin Coolidge said:

“Don’t expect to build up the weak by pulling down the strong.”

Some Illinois politicians could learn a lesson from Coolidge. Illinois has raised personal income taxes by 67 percent and the state has the highest out migration of all its neighboring states. Illinois has the fourth-highest corporate tax rate in the industrialized world, and employment roles have dropped by 72,000 in the past year.

Taxing higher income earners at a higher rates is not the answer to Illinois’ problems. Taxes don’t work as a punishment for success – instead they just make people and businesses leave.