"Hauser's Law" is the observation by economist Kurt Hauser that revenue as a percentage of GDP remains at about 19.5% of GDP no matter what the marginal tax rate is. It is apparently the result of the fact that increases in marginal rates, which characterize soak the rich schemes like Barack Obama's, simply cause people to shift or hide their income to avoid higher taxes:
As David Ransom put it in an article written earlier this year for the Wall Street Journal:
What makes Hauser's Law work? For supply-siders there is no mystery. As Mr. Hauser said: "Raising taxes encourages taxpayers to shift, hide and underreport income. . . . Higher taxes reduce the incentives to work, produce, invest and save, thereby dampening overall economic activity and job creation."In other words, if the farmer takes more of the golden eggs produced by the goose who lays them, then it will simply lay less of them--or find ways to hide them from the farmer.
Putting it a different way, capital migrates away from regimes in which it is treated harshly, and toward regimes in which it is free to be invested profitably and safely. In this regard, the capital controlled by our richest citizens is especially tax-intolerant.
Hat tip to Sophistpundit on the graph.