The “good intentions” of those in government cannot begin to understand what their actions will actually produce. They have insufficient information, insufficient knowledge of private-sector workings, and overly optimistic knowledge of what their “good intentions” will bring.
In reality, the historical data show that (1) the economic rise of minorities preceded passage of the Civil Rights Act of 1964 by many years, (2) the existing upward trend was not accelerated, either by that Act or by quotas that became generally mandatory in 1971, and (3) during the era of affirmative action, such disadvantaged blacks as young males with little experience or education, and members of female-headed households, actually retrogressed relative to whites of the same description, while more advantaged blacks rose both absolutely and relative to their white counterparts. In short, although affirmative action invokes the name of the disadvantaged, these are precisely the people who have fallen further behind under its auspices.
-Prof. Thomas Sowell (Civil Rights: Rhetoric or Reality?)
This is similar to the early 1990’s luxury boat tax that was supposed to soak the rich with a 10% tax on any boat over $100K. The rich merely stopped buying boats and bought other expensive stuff not covered by the tax.
The Unintended Consequences? They put boatbuilders and their employees out of business. A long excerpt from WaPo (reformatted, emphasis mine):
Greg Proteau, a spokesman for the National Marine Manufacturers Association in Chicago, reports that U.S. production of $100,000-plus yachts peaked at 16,000 in 1987. By 1990, yacht output had fallen to 9,100. In 1991, the first year of the luxury tax, it dropped to 4,300; last year, 4,250. Employment at the two North Carolina factories of the largest luxury-boat manufacturer, Hatteras, has dropped from 1,550 to 500 since 1987.
“We started losing sales in 1989 as an industry,” says Proteau. “The whole industry is off 40 percent, but the big-boat segment is off 80 percent.” He estimates that about half the sales losses can be attributed to the recession and half to the tax, and that 25,000 to 30,000 “on-line blue-collar manufacturing jobs” have been lost out of a total of about 50,000 in the last three years.
So, did the Rich get nailed? Nope – Government action “turned on the little people”. This is what happens when those who have little to no knowledge of how an industry or an economy actually work believe they do. And this is a perfect example of the bad thinking that goes on: that the “target” victim (the rich) will maintain the status quo of purchasing.
The Left never realizes that once they’ve made targets of people that those people won’t change their habits. What stoopnagle thinks that people won’t react to a negative policy aim directly at them?
Rhode Island, home state of Chafee, a former Navy secretary, has probably been hurt most. Ken Kubic, legislative chairman of the Rhode Island Marine Trade Association, says that “half of the boating businesses do not exist anymore” and that 12,000 jobs have been lost, “directly or indirectly, because of the boating tax.”
He tells the sad story of Dave Walters, who for many years employed about 50 workers building highly respected Cambria racing yachts for $400,000 and up, with customers such as actor Christopher Reeve. “The luxury tax cut off all sales,” said Kubic. “The bank took his house, his car, all his business assets.” The molds and tooling were sold off to a shipbuilder in Costa Rica, where, by the way, there’s no 10 percent luxury tax.
Which is the reason why President Xiden is trying to hard to get a worldwide corporate tax completed so that when Progressives decide to punish people for being successful, there will be no place to hide. It should be troubling to the rest of us if that actually goes through and becomes Treaty Law, what the ramifications of it will be on the rest of us…
(H/T: Cafe Hayek)