Filed under: Capitalism, Democrat Corruption, Economy, Progressivism, Statism, Taxes | Tags: Enlightened Self-Interest, Free Market Capitalism, Responding to Incentives
Ten days ago, I wrote a post about how the attempt to redistribute wealth usually ends up redistributing the wealthy instead. When government becomes too eager for ever higher taxes and fees, those who are trying to protect what they have earned often pick up and move out of that government’s jurisdiction.
I was inspired by new French President Francois Hollande’s attempt to raise taxes on France’s wealthy to 75%. Imagine a government that allows you to keep just 25¢ out of every dollar you earn. That’s a pretty powerful incentive to move. The redistributors, however, always assume that people, poor saps, will just obey.
Thanks to U.S. tax rates — Obama’s insistence that ‘the rich’ have not been paying their ‘fair share’—has resulted in the number of Americans who tore up their passports in 2011 and left the country to move permanently overseas, was seven times higher than those who left in 2008. In the first three-quarters of 2012, more than 1,100 Americans renounced their citizenship and made their homes elsewhere, according to the Federal Register. The available data for the fourth quarter of 2012 are not yet available, but on track to surpass the 2011 numbers.
There are 6 million American citizens living abroad and continuing to pay U.S. taxes. Expatriates increasingly abandon their citizenship over taxes. The U.S. is the only industrialized country that requires citizens living abroad to pay income taxes even if their income is generated abroad. The newly passed law concerning the “fiscal cliff”has increased the taxes on individuals earning more than $400,000 a year and married couples earning more than $450,000 to 39.6 percent, up from last year’s rate of 35 percent.
People and businesses respond to incentives. This is a very simple fact of life, yet liberals in particular and politicians in general seldom get it. They are sure that if they just raise your taxes, they will get more money. Doesn’t work that way. Often they get even less revenue.
Works the other way too. When you reduce taxes, particularly on businesses, but on individuals as well — you free people up to grow, attempt, invest, invent and develop to improve their lives and to follow their hopes and dreams. And when people are set free to grow, economies grow as well.
How very odd that Obama cannot grasp this simple basic economic concept. If his hope is to take away from the rich in order to help the poor, he’s wasting his time. The evidence, however, is even less encouraging. Those whom he expects to reward with the revenue garnered from the rich, are his supporters and the unions. That isn’t philanthropy, it’s graft.
(h/t: Gateway Pundit)