Filed under: Capitalism, Economy, Health Care, Taxes | Tags: Capital, Consequences, Taxes
Walter Wriston, former chairman of CitiCorp, was among the most innovative financiers of our time, and among the first to recognize the tumultuous changes reshaping the world in the information technology revolution. He said, in his 1992 book The Twilight of Sovereignty, that:
Capital will go where it is wanted, and
stay where it is well treated.
It will flee from manipulation or onerous regulation
of its value or use and no governmental power
can restrain it for long.
Walter Wriston is talking about consequences. Legislatures often think that they can raise taxes at will, impose mandates and regulations, and nothing will change except that more money will flow in. A Democratic Congress, fondly remembering FDR, is sure that raising taxes is no big deal because under Roosevelt the top marginal tax rate was 94 percent on all income over $200,000, and we got along with that, didn’t we?
Companies are exiting California, and the same is true for other high-tax states. Doctors are leaving Massachusetts where mandates and restrictions take both pleasure and profit out of their work. When the business climate turns sour, sensible businessmen go where the climate is better and there is opportunity. When ObamaCare enacts a tax on companies that manufacture medical equipment that makes it impossible for that business to make a profit, that business will probably look for a way to manufacture in a location where costs are lower, often overseas. Capital will go where it is wanted, and stay where it is well treated.
The farmer in a rural area who always depended on a buyer who traveled through the region, with the availability of a telephone can learn about prices in the city, in the country, and is no longer dependent. The politician, who once was protected by his dignity and his office, now finds that his words and actions can be captured and exposed on YouTube and in his opponent’s campaign commercials almost overnight. When people have more information, they can act on it.
ObamaCare is built on a house of cards. It takes hundreds of billions of dollars out of Medicare to fund ObamaCare, then claims that those cuts will make Medicare more solvent, even though the money “saved” will be spent on ObamaCare instead of being used to close the gap between income and outgo in Medicare. It is largely a sleight of hand arrangement that spends the same money more than once. Voters who are becoming informed increasingly are demanding repeal. 50 percent of likely voters “strongly” support repealing ObamaCare, 58 percent support repeal, while only 32 percent “strongly” disagree.
Information matters. It changes the world. That is one reason why so much regarding politics and taxation takes place in back rooms. They don’t want you to be informed — even if they talk about “transparency.”