Yes, people do respond to incentives. Especially people with the means to respond:

Fearing an increase in capital gains and dividend taxes, many of the rich are unloading stocks, businesses and homes before the end of the year.

Wealth advisors say that with capital-gains taxes potentially going to 25 percent from 15 percent, and other possible increases in the dividend tax, estate tax and other taxes, many clients are selling now to save millions in taxes.

“Under almost any scenario, it makes sense to take the gains this year,” said Gregory Curtis, chairman and managing director of Greycourt & Co. “Clients aren’t selling willy nilly. But if they can and they have a huge gain, they’re selling now.”

You and I can't do that, of course, as the invaluable John Hayward points out:

The great asset sell-off also illustrates a lesson that class warriors have always been slow to learn.  The wealthy are not only different from middle-income Americans in terms of the money in their wallets.  The more dramatic difference is that the wealthy have far more options for responding to government policies, particularly taxes and regulation, than the rest of us do.  Middle-class people cannot dramatically re-arrange their lives in response to tax increases.  They have to make do with less, of course, but that’s not the same thing – it’s a response to changing conditions, not a deliberate strategy chosen from among many options.

But people who own a large amount of tangible assets and stocks can take deliberate steps to minimize their exposure to tax increases.  At the higher levels, and in response to the most dreadful government policies, they have realistic options for leaving the United States altogether, or at least moving their assets overseas.  These avoidance strategies, as you can see right now, are less economically productive than what wealthy investors and their asset managers would prefer to do with their money.  They are far better investors than the architects of the Solyndra debacle.  Their expenses and investments produce more stable, healthy jobs than central government planning does.

Emphasis in original I would differ with Hayward on one point -- class warriors never learn this lesson. While we won't know if tax rates on "the rich" will be going up for a while, the amount of revenue that these tax rates delivers will not be commensurate with what is needed to solve the deficit problems we face. And as always, we'll be told that the results are "unexpected."

Cross-posted and comments welcome at Mr. Dilettante's Neighborhood.