How else would there be so many wealthy Democrats in favor of tax increases?

It is worth to spend up to X dollars in order to avoid X dollars in taxes, and therefore, the more taxes the government is after, the more a tax payer can budged for the following:

1. Relocation to a different state or country with lower taxes.
2. Extremely smart tax attorneys.
3. Business and corporate restructuring.
4. Forming a foreign company and using it as an off-shore tax shelters.
5. Expatriation, namely renouncing one’s citizenship. (A drastic move that becomes a more attractive option the more oppressive the tax code becomes.)

Naturally, the richer you are and more taxes the government is after, the more money you will be inclined to, and are capable of spending on tax avoidance. (Tax avoidance is the act of legally avoiding tax payments, unlike tax evasion which is the term used to describe illegal non-payment of taxes.)

The above options, with the possible exception of #1 are not available to most middle class people, but they sure are available to the rich. Everybody is supposedly equal under the law, however, the richer you are, the easier it is for you to avoid oppressive taxes and take advantage of “loop holes” in the law. (A tax loop hole is nothing more than a legal way to avoid paying a tax.) Consequently, the rich gain an advantage, as the lower rungs of wealth can’t cope.

The super-wealthy gain a further advantage over the just wealthy, who gain an advantage over the merely rich, who gain an advantage over the middle class, who think they have nothing to worry about because only “the rich” will be taxed more, but the middle class does not come out unscathed.

Because of tax avoidance and several other factors, tax increases on the rich never amount to the revenues the socialists promise. However, the increase in social spending still happens, resulting in budget crises, and consequently leading governments to legislate tax increases on anything that moves. One only needs to look at the State of New York, and the State of California for proof.

This creates a situation in which those who are merely well-off get beaten back to the middle class, the middle class gets beaten back to the lower-middle class, etc., while those who are very rich can avoid taxes and still stay rich, thereby further skewing the wealth distribution curve.

If you think the government can close all the “loop holes” and create tax laws that are so tight that even the super wealthy can’t escape, and all will be fine, then think again:

1. First and foremost, it is doubtful the Congress, a body mostly consisting of wealthy individuals (both Democrats and Republians), would have the desire to do such a thing.
2. It is impossible to anticipate all the ways in which taxes can and will be avoided.
3. Limiting corporate tax structures and deductions would also limit the flexibility business need to thrive, thereby stifling economic activity, a consequence which always hurts the poorer levels of society more.
4. Limited opportunities for tax avoidance leads to more tax evasion.