DENNIS PATRICK: SOAKING THE RICH WILL CHASE THEM AWAY AND YOU WILL PAY FOR IT!
Soak the rich! Tax the wealthy! Make ‘em pay their fair share! We’ve heard it all before. Finally, this argument bears the fruit of its own foolishness.
For all the schools that incessantly preach that profit is bad, for Hollywood that promotes the fiction that capitalism is evil, for all the anti-business bureaucrats and elected officials supporting never ending subsidies that produce good feelings but never lasting results, the chickens have come home to roost.
There are inevitable unintended consequence of misguided government policies. Ample evidence shows that the US is not just redistributing the wealth, it is redistributing the wealthy.
As with so many other things in life, the world of economics and finance is forever dynamic. Nothing remains static; everything changes. People, businesses and money are always in motion moving faster and in greater volume than most people realize.
The US continues morphing from a constitutional republic into a government of some of the people, by some of the people, for some of the people. The government has placed a huge target on the backs of the wealthy causing them to flee America. A growing vanguard leads the exodus. To protect their businesses, assets and investments the wealthy are departing in increasing numbers.
Protecting privacy is also a concern. IRS reporting requirements ensures the publicity of wealth. That, in turn, ensures the need for body guards, kidnap protection and bullet proof limos.
The well-to-do are not just physically emigrating. They are divesting themselves of their US real estate before moving their wealth overseas. There’s more. To complete the deal and to escape the clutches of the federal government, they are renouncing their US citizenship. This puts them out of reach of the federal government including the IRS, EPA, OSHA and a host of other punitive federal and state bureaucracies.
Wealthy people are successful people and they are not stupid. Don’t for a moment mistake their industriousness for greed. US Census records conservatively indicate 300,000 wealthy persons per year chose expatriation since 2006. Holding constant, 2.1 million will choose expatriation between 2006 and 2013.
Census data also shows where people and businesses are moving. At first it was from one city or county to another. Then it was from state to state. No tax or low tax states benefiting from wealth immigration include Virginia, Alaska, North Carolina, South Carolina, Colorado, Wyoming, Texas, Arizona and Nevada. High tax, big spending, business-hostile states like New York, New Jersey, California, Massachusetts, Connecticut, Illinois and Michigan are the losers.
The wealthy were then forced to find new homes in places like Australia, New Zealand, Belize, Costa Rica, Panama and the Cayman Islands where business owners and their wealth are welcome. Some countries aggressively pursue American ex-patriots. Unlike US politicians from whom they fled, their adopted governments appreciate business owners for their effort and sacrifice. These countries celebrate achievement and reward business owners for their hard work and financial risk-taking.
FOR SALE: LARGE HOME JUST SOUTH OF BISMARCK
Those who can most afford to emigrate are no longer prisoners of Big Brother. The high tech revolution has freed business owners to run their operations from anywhere in the world. I-phones, cell phones, Skype, e-mail, internet, satellite TV and more facilitate the flight to freedom. Businesses and the wealthy no longer put up with looters, free loaders and politicians. They no longer need to struggle against the US bloated government flush with bureaucrats living off the largesse of the producers.
Capital flight is the natural result of taxing. The erosion of the tax base means fewer people to carry the tax burden. That will only accelerate the exodus.
No cheering, please. Here is the dirty little secret the media doesn’t tell us. FACT: The top 1% (1.4 million people) paid $392 billion in income taxes in 2008. FACT: The IRS collected $1 trillion in income taxes in 2008. Stated another way, more than one-third of income taxes collected in 2008 were paid by 1.4 million people.
Based on this IRS data, the top 1% paid 38% of the $1 trillion in income tax ($392 billion / $1 trillion). Here’s what would happen if the top-earning 1% left the US.
100% of tax revenue minus 38% of taxes lost = 62% of taxes remaining.
38% / 62% = 61% additional tax burden for everyone left to make up the shortfall.
If the top-earning 5% left, we would all face a 142% increase in taxes to make up the shortfall.
If the top-earning 10% left, we would all face a 234% increase in taxes to make up the shortfall.
Some web sites consulted by ex-pats include The Sovereign Society, Escape Artist, Expat World and Second Passport.
The yearning for freedom beats eternal in every human heart. As one of my friends wryly signs his e-mail, “I love my country. It’s the government I fear.”
DakotaBeacon