TAXES HAVE CONSEQUENCES

Rational Expectations

John Kerry docks his yacht in Rhode Island where taxes are lower rather than in Boston Harbor which would be a little more convenient. Kerry isn’t the only one, you can be sure of that. Rhode Island gets more revenue because their tax rate is lower. Massachusetts gets less revenue because their tax rate is higher.

Do not be critical of John Kerry for moving his boat, excuse me, his yacht. It was the smart thing to do. You and I would do the same if we had a yacht, in my case it would be a boat.

This is but one example illustrating why a 10% increase in tax rates does not produce a 10% increase in revenue. People have alternatives. Economists have a name for it. They call it the law of “Rational Expectations”.

Debt and Taxes
California and New York are two of the states in the nation with the weakest balance sheets.
California and New York are two of the states in the nation with the highest rates of taxation.
This is not a coincidence.
Bob B

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