US Tax Hike On Wealthy Is A Policy Of Disaster

American voters re-elected Mr. Barack Obama for a second term as the President of the United States. Mr. Obama campaigned on ending the Bush-era tax cuts on income above $250,000.

After being re-elected Mr. Obama confirmed that voters have expressed their support to his plan to tax the wealthy. Tax increase on the wealthy is a dumb solution to any fiscal problem. Ask any economist, how taxes work.

Tax increase on the rich raises taxes on everyone. Voters were told that this tax increase on the wealthy will not cost you a dime.

So voters thought they were excluded from the tax hike, with no understanding of economics, the lower wage earners were able to vote to take money away from the higher wage earners and re-distribute the wealth.

But… unfortunately they’ll get hit with the tax hike just the same.

Think about it. If the rich has to pay more taxes, they will have to increase their income. With supply remaining at the same level, only way to increase income is to increase the price on goods and services. End users, the customers who were the voters to support tax increase will have to pay more for the same amount of goods and services.

What the US voters did by re-electing Mr. Obama has send a mandate to increase taxes on themselves. They are living in a fool’s world if they think the increase in taxes on the wealthy will be paid by the wealthy out of their own pocket.

Welcome to a new era of recession. Expect the most unexpected in the US economy in next few years.