So. Many. Things. Wrong.

Robert Reich and Paul Krugman have been parading around with their schtick of half-truths and distortions again.  The particular one this time is that increasing tax rates to pre-Bush-tax-cut levels and increasing federal government spending will boost the economy.  Oh, and extending unemployment benefits yet again (despite the fact that over and over again people have shown that extending benefits increases the average length of time a particular person remains unemployed).  This is the basic tone of the article:

Krugman starts from the premise that, “The top 0.1 percent of taxpayers — roughly speaking, people with annual incomes over $2 million — had a combined income of more than a trillion dollars.” Without ever so much as a nod toward evidence or logical rigor, he jumps to the conclusion: “That’s a lot of money, and it wouldn’t be hard to devise taxes that would raise a significant amount of revenue from those super-high-income individuals.”

 ...“Put more money into the pockets of average Americans [by] extending unemployment benefits. Don’t stop there. Create a WPA to get the long-term unemployed back to work. And a Civilian Conservation Corp to create jobs for young people. Hire teachers for classrooms now overcrowded, and pay them enough to attract people who are talented as well as dedicated. Rebuild our pot-holed highways. Create a world-class infrastructure. Pay for this by hiking taxes on millionaires.”

 But wait, let's think about this. 

Federal income tax data from 2010 reveals that if the government had confiscated all the remaining income ($1.293 trillion) of the top one percent on top of their 2010 tax payments, it still would not have been enough to eliminate the deficit ($1.294 trillion). And, how much of those people’s income would exist to be confiscated in year two?

 See - there is this thing called the Laffer Curve.  And it makes logical sense.  And has been shown in history time and time again.  It is simply the reality that people change their behavior in response to a change in taxes.  The Laffer Curve is the spectrum of possible revenues for a taxing entity, ranging from zero revenue at a zero tax rate to a theoretical maximum revenue at some unknown tax rate.  But it doesn't stop there.  The curve continues, decreasing from the theoretical maximum to reach zero revenue again, at a 100% tax rate.  Basically just the idea that yes, as tax rates increase, the government claims a larger share of your productivity, but..., how productive will you be if the government claims ALL of your productivity?  Even the strongest advocates for statism acknowledge this by supporting sin taxes.  It is foolish to assume that if taxes are increased the most productive, innovative, individuals will continue to be jut as productive. 

Oh, and there is that whole pesky truth about Keynesian policies not exactly working out over the past four years.