Double Taxation Flowchart

Explaining the Perverse Impact of Double Taxation With a Chart:

There are a lot of boxes, so it’s not a simple flowchart, but the underlying message hopefully is very clear.

1. We earn income.
2. We then pay tax on that income.
3. We then either consume our after-tax income, or we save and invest it.
4. If we consume our after-tax income, the government largely leaves us alone.
5. If we save and invest our after-tax income, a single dollar of income can be taxed as many as four different times.

You don’t have to be a wild-eyed supply-side economist to conclude that this heavy bias against saving and investment is not a good idea for America’s long-run prosperity.