Although it may seem counterintuitive, raising taxes on the rich does not actually increase the amount of taxes the government collects. How could this possibly be the case? Because the many loopholes in federal income taxes, capital gains taxes and other taxes enable people to partially avoid these taxes, or so says Professor Antony Davies of Duquesne University in Pittsburgh, Pa.
Instead of discussing how to raise tax revenues, perhaps we should spend our energy simplifying the tax code. This would make it more difficult for people to avoid taxes and, Davies says, “The less time and money we spend trying to work around a complex tax code, the more time and money we will have available to put to more productive uses.”
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