That's exactly not what I was saying - I was talking about capital gains which isn't taxed as income. Currently that sits at 15%, but will rise to 25%.

Fair point, presumably "income" would just be earned income and dividends.

The challenge is that when you change the rate, people change their behavior.

Here's some interesting data showing the historical relationship between behavior and capital gains policy over time:

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...

If you assume currently capital gains collections are $150B, increasing them 33% will add $44B.

From a pragmatical pov, that just doesn't seem like much. And that's assuming there's not a contraction in capital gains harvesting, which wouldn't square with history.

Look, I'll admit, I'm not unbiased here. I generate 80% of my income from churning long-term assets.

I sold a company that I bootstrapped a few years ago, and we got a good price.

I'm able to generate about $120k per year after-tax. My goal is to never touch the principal and live off returns.

Now, I'm bootstrapping my next startup... The $120k allows me to work 1 day a week consulting to "plug" the gap between my family's spending and my income. The other 4 days, I work on bootstrapping my startup.

If taxes go up, that will cost me an addl $6700 per year in taxes.

So my choices are...

1) take more consulting work -> Won't do this because my startup needs my time and I'm already working 60 hr days

2) try to generate higher returns, -> Not going to do this because I'm already maxed out with the risk I feel comfortable with

3) cut back my personal spending, -> Yes, this is what will happen.

For the affluent retired, I suspect many of them will choose to cut back too.

From where I'm sitting, the tax policy is going to hit me fairly hard, will only produce an additional $44B in taxes, and will probably cause a recession. So it doesn't seem very wise.

That Forbes article seems highly politicized and doesn't cite a source for that number.