Republican presidential Rick Santorum is advising President Barack Obama not to raise taxes on the wealthiest 1 percent of Americans because "higher-income people don't have to pay taxes if they don't want to."
"Once we defeat Barack Obama this economy will start turning around," the former Pennsylvania senator told a crowd in Miamisburg, Ohio. "Because you'll know you have someone in there who's going to unshackle businesses, reduce rates, not increase them. The president's promised increased taxes if he's re-elected."
"All he wants to do to solve the deficit problem is increase taxes on people, particularly higher-income people," Santorum continued. "You see, that sounds very populist. Go after the 1 percent. It's interesting because the British just did this. They went after the 1 percent in Britain. They dramatically increased taxes on the highest-income Brits. And guess what? It failed."
"What happened? Well, higher-income people don't have to pay taxes if they don't want to because they can move their money somewhere else, they can move their investments. They can stop investing. They can stop working. They don't need to work. They're higher-income people."
DeAnne Julius, the former chairwoman of Chatham House in London, has explained that Britain's 50 percent marginal tax rate on high-income earners should not be compared to 35 percent rate imposed on wealthiest Americans, who can take advantage of loopholes in the U.S. tax system.
"[R]elative to other countries, the U.K.'s 50 percent tax rate for high earners is uncompetitive, while the U.S. top rate of 35 percent is still highly competitive," Julius wrote in an October 2011 op-ed for The New York Times.
"These factors led 20 British economists to warn that the 50 percent top tax rate is doing lasting damage to the British economy and is unlikely to raise much if any additional revenue," she added. "However, these factors do not apply to the United States, where the current tax regime allows many high earners to escape paying even their proportional share of taxes and where both average and marginal tax rates are low by international standards."
