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Whether Buffett recognizes it or not, rich Americans’ investments are needed to push the economy ahead. Taking more from them deprives the private sector of the fuel it needs to expand. Government cannot boost growth by increasing taxes. Nor does giving more money to the government create jobs. All it does is cause the government to spend more. Economists Richard Vedder and Lowell Gallaway found in a well-known study that for each dollar in new taxes raked into the Treasury, Washington increases spending by $1.58. An updated study by Vedder and Stephen Moore, an economist who writes for the Wall Street Journal’s editorial pages, found that for every dollar in new taxes, the government spends $1.17. Either way, increases in tax revenues won’t close the deficit. They will only widen it.
