The rich are responsible for creating most of America's jobs. Raise their taxes and many of those jobs will disappear -- so say the rich, anyway.
Problem is, that might not be the case. When it comes to taxing the rich, there may actually be room to do a lot more, according to a new study from a professor at the University of Massachusetts, Amherst.
The study, from assistant research professor Jeffrey Thompson at UMA's Political Economy Research Institute, argues that even when the government imposes higher taxes on wealthy people, most of them carry on with their lives as they did before.
They don't pick up and move to states where the tax rates are lower, the study claims. They don't cut back on their hours at the office in a way that might cause economic growth to slow and they seem just about as likely to invest money in new business ventures.
Basically, the report suggests that when the rich pay more a bit more in taxes, the economy doesn't really suffer at all.
Thompson isn't the first to reach this conclusion. Analysts and financial professionals generally agree that raising tax rates on the affluent is unlikely to have much of an effect on their spending and investment patterns. As recently as last month, the National Bureau of Economic Research released a study arguing that taxes have little bearing on the kinds of consumer decisions that cause the economy to move.
Such research only seems to bolster the arguments of people like Warren Buffett, the billionaire financier who has repeatedly called for a tax code that would impose higher taxes on the wealthy.
It's an idea that can hardly be called unpopular. President Obama included a like-minded measure in his latest budget proposal, and proposals to tax the rich more have earned considerable approval among both the general public and the rich themselves.
The question of how much the rich should be taxed is only likely to take on greater urgency as lawmakers scramble to find a way to close the $1.1 trillion federal budget deficit. What the wealthy pay in taxes seems to have a direct bearing on this: A recent analysis from the National Priorities Project found that tax breaks for the richest 5 percent of Americans are costing the U.S. Treasury about $11.6 million every hour.
Want to know what the super-rich do for a living? Here are the most common occupations of the 1 percent:
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