Taxes Schmaxes

Now that most Americans have received a pay day, and have had opportunity to view their pay stubs, it is very likely they've noticed fewer numbers going into their bank accounts.  Taxes have increased on them, and they didn't even think they were rich!

FICA, Medicare or 'payroll taxes' have increased, taking a couple percentage points away from take-home pay.  This in addition to the increases on the marginal income tax rates on those that have incomes in the upper six figures plus?  Gives rise to this interesting fact...Rolls-Royce had it's best year of sales EVER!  One may think this due to China et al accounting for more demand for luxury goods, but hey, the USA increased it's demand by 17%.  HOW IS THIS POSSIBLE?!?  A luxury good, more sold, this implies more disposable income on the part of the rich, right?

Maybe not.

When the taxes on economic activities involving investment (business expansion, etc.) increase, the opportunity costs of alternative dispositions of $ change so now the rich guy takes his money and puts it to other uses, specifically purchasing 'real' assets instead of 'paper' assets; gold, collectibles, etc. instead of expanding businesses (which then would have hired people, who would have more $ and then more economic activity...).

People respond to incentives.  If a all-knowing third party (gov't) establishes 'perverse incentives', do not be surprised when those with resources (rich) do something other than what was expected.

http://www.autoblog.com/2012/01/11/rolls-royce-records-highest-annual-sales-in-107-year-history/