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The high taxes and regulatory burdens they favor have the effect of protecting established businesses. To accumulate a fortune requires earning a high rate of profit and continually reinvesting most of it in the business. The greater the tax burden, the harder this process becomes. In the same way that small investments can turn into big gains when compounded over time, even relatively small tax burdens can amount to enormous losses, since they too get compounded over time: the million dollars taxed away from a company today doesn’t just cost it a million dollars, but all the income that million dollars would have generated had the business been free to reinvest it. Regulations, meanwhile, impose substantial compliance costs on a business—costs that an established business with a bull pen of attorneys can more easily meet, but which can stop upstarts in their tracks.
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Don Watkins (Equal Is Unfair: America's Misguided Fight Against Income Inequality)