Increasing the tax rate will generate less tax revenue

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President Obama thinks that by increasing the tax rate he will generate more tax money to run the government. He is wrong and here is why. Take the case of a Doctor who has a practice with 4 other doctors. Each one makes about $300,000 a year in income and bonus. Under the Presidents plan they would pay 40% tax rate on the $50,000 (-$20,000) above $250,000. They would also pay the Social Security tax and Medicare tax on their total salary (now capped at $106,000) This means thy pay (-$24,000). They also lose the Home mortgage interest deduction and the charitable deductions. To earn $50,000 more in income they will pay over $50,000 to the government. The Doctors have a meeting and decide that they will only work four days a week and reduce their salary by 20% ($60,000). This will mean that they will be seeing fewer patients and will need less staff. They cut staff hours by 20% 9government receives 20% less in taxes). These doctors are like everyone who is in that tax bracket of above $250,000 (the wealthy) and they do not want to work and produce more if they are going to lose it all to the government in taxes. Would you want a raise of $100 per week if the government would take $120 more out of your pay check? What happens next is the government needs more tax money so they drop the tax bracket of 40% down to those making over $100,000. Then they simplify the tax code and make the tax rate 5% higher for everyone or they remove deductions from everyone and in effect increase your taxes. Remember the Income tax, when first started, was only gong to tax the the very rich when the average salary was less that $6,000 per year, and you got a $3,000 deduction to start with. The tax would only effect about 5% of the people.