| First, let us define some terms. High progressive tax rates mean the government takes the next dollar earned at a rate over 50%. As the rate of tax on the next dollar earned tops 75%, the disincentive becomes excessively problematic. As the rate of tax increases on the next dollar earned tops 90%, the disincentive becomes excessively a near-ban. |  |
 | If one person or a business is told that if you serve your fellow citizen, the government will take all the money earned, the person or business will have no incentive to serve their fellow citizen. The rich are defined by anyone subject to the high progressive tax rate. The people being served are defined by anyone wanting to do business with a person or business subject to high progressive tax rates; in which the poor are a significant subset. |
| Let us examine how the rich become rich. Why does anyone give someone else money? The simple answer is because the person is serving them. Serving someone is broadly defined by serving or providing a product. Why do people give rich people more money than people give poor people? The simple answer is because the rich offered better services at a lower cost compared to the poor. This is defined by everyone individually making buying decisions. |  |
 | Do poor people have the right and liberty to give their money to whomever they wish? Yes! The poor have the right and liberty to offer their money to their fellow poor person for a gallon of milk, a toy, rice, a house, a car, health care, or entertainment. Normally, a poor person can not offer the same or better-quality services compared to the rich. |
| Most of the time, a rich person finds a way to do high-quality work once and have others inexpensively copy that product or services by the millions. Singers sing to millions at once on tv. Sports stars entertain 100,000 people in a stadium. Bill Gates leads a team of talented computer programmers to produce great products and uses inexpensive CD’s or downloads to distribute that product or service. |  |
 | A CEO of a billion-dollar company is paid millions because he or she is highly skilled at controlling labor hours and making quality investment decisions. On the most part, the rich run a business or part of a business that is producing ten to a hundred times more wealth for others compared to their earnings. |
| Rush Limbaugh does the same high-quality show whether 100 or 500 stations carry the EIB network. The EIB network has allowed countless thousands of people to capitalize on Rush’s quality show to make a great living and propel their businesses. A person running a $1 billion a year business is responsible for several million-dollar jobs, dozens of jobs over $300,000, hundreds of jobs over $100,000, several thousands of jobs over $70,000 and tens of thousands of part-time jobs. |  |
 | These jobs are directly through the business they run and those that are vendors or otherwise associated. If the CEO receives $10,000,000 per year, others receive ninety-nine times that or $990,000,000. Anyone can apply for that $10,000,000 CEO position; however, the board of directors knows that mistakes can cost thousands of jobs and billions on lost wages over time. Experience of success is vital to increase the odds that business will thrive. |
Back to the title of this blog, “High Progressive Tax Rates Bans the Rich from Serving the Poor.”
| It is imperative to understand that this high tax rate is on the transaction of services from the rich to the poor. Both sides must pay that tax. It can be correctly stated that 100% of the money the rich pays in taxes comes from the people paying for the rich person for services. When the poor offers to pay a rich person for services, the poor person must overcome that high tax rate in order to entice the rich to provide services to the poor. |  |
 | The Government is telling the poor person that they will take 90% of what they offer the rich in order to be served. When the tax rates reach 90 plus percent, the poor must significantly increase how much they offer the rich to serve them. When the service is for wants and not needs, the poor will just do without when the price becomes too high. A rich person has the opportunity to take their riches and just live comfortably without working for the rest of their lives. |
| The rich person not working is also the rich person not providing services and products to the poor. The poor have shone through hundreds of years of buying decisions that they want to offer the rich money to serve them. If the government takes all the money the poor gives the rich for that service, the rich will stop offering the service. The high progressive tax rate is effectively banning the rich from serving the poor. |  |
 | Other people might provide that service; however, the rich not offering their services means one less person offering services and many people’s first choice no longer available. Some people might claim that this gives others the opportunity to work; that is short-sighted. Those others can offer other services or compete for the same service. People’s desire to be served is not even close to being satiated. |
| This disincentive structure could also manifest in the rich scaling back or not starting that next business. It is difficult for the economist to measure what does not happen. The economic researcher can not research timelines that did not happen. The economic researchers can rarely sort through the hundreds of factors that affect the economy. |  |
