Via Adam Smith Blog:

A few days ago the Evening Standard carried a story about Ken Livingstone’s call for an 80% tax rate. He wants those earning over £200,000 to pay a 60% rate of income tax and those earning over £1,000,000 to pay an 80% rate.

Clearly such a policy would be self-destructive. No one would pay such extraordinary rates of tax, tax takes would fall, growth would slump and tax evasion would rocket. It would mean that the government punished success and aspiration with nothing to show for it. If anything, the government should be looking to remove the 50p tax rate, which raises little extra money, damages growth and send the wrong message to Britain’s businesses.

Even worse than this economic illiteracy is the way Ken has presented the tax as an attack on bankers. In fact, the vast majority of people earning over £1 million are businessmen and entrepreneurs who invest in this country. Attacking them and the wealth they create would hurt businesses in need of investment and capital at this critical time.

Of course, for the current bunch of liberal incompetents running our government today, taxes have nothing to do with the economy, and everything to do with politics and pandering:

“Democrats believe we must permanently extend tax cuts for the middle-class before they expire at the end of the year, and we will.,” Reid spokesman Jim Manley said in a written statement that blamed the GOP for the delay. “Democrats will not allow families in Nevada and across the country to suffer or be held hostage by Republicans who would rather give tax giveaways to millionaires and corporations that ship jobs overseas. We will come back in November and stay in session as long as it takes to get this done.”

Sen Chris Dodd, D-CT, told reporters, “I think there are strong views being held. I, for one, subscribe to the notion that we ought to have a vote to extend the tax cuts for those that really need them and stop those for the ones who don’t,” Dodd said, but he quickly added, “There’s a mixed view. Tax policy is not our strongest political argument with the national public. We know that. It’s a divided caucus. That’s not uncommon.”

Several Democrats advocated for a delay, saying it is the one way to ensure politics does not enter into the equation. Republicans want to extend all of the tax cuts and are poised to pounce on any bill that falls short, as well as any member who does not support their position.

They should cut all taxes, across the board. It is telling that you have Liberal Democrats such as Harry Reid and the ethically challenged Chris Dodd stating they want to let people and organizations whom they deem worthy and “need” a tax break receive one while punishing others with confiscatory tax rates.