When Taxes Go Up, Rich People Leave
The right-wing conservatives have many fantasies. Muslims will embrace democracy if you invade their countries. Forever monogamy works, as long as you find the right girl. Voting for Republicans will make goverment smaller. People will use less marijuana if you make it illegal, and so on.
However, one of the biggest left-wing fantasies is that if you raise taxes on rich people, they’ll just say “yes master” and hand it right over. In the real world, this doesn’t happen.
Rich people like their money. The vast majority of rich people worked very, very hard for their money. If you dramatically raise taxes on them, they’ll make sure they won’t pay it. They do this in three ways.
First, they’ll find loopholes in the tax law so they won’t have to pay your new taxes. Most tax laws passed by Western governments always have loopholes like this, because politicians are A) stupid, B) don’t understand economics and/or C) owned by the very rich people they’re taxing.
Rich people have armies of tax attorneys and accountants that normal people like you and me don’t have access to. They use these resources to circumvent many, if not most, new tax laws.
If that doesn’t work, they take the second option and move their money offshore where it’s not taxed (or taxed much less). I’m not even rich, and I’ve done this myself. I don’t feel bad about doing this one bit. I work seven days a week to earn my money, have worked many 70, 80, 90, even 100 hour weeks over my business career to earn my income. I have no interest in giving it to some Bush-Obamism politician so he can waste 40% of it and spend the other 60% on things like giving it to people who don’t want to work or bombing brown people in some distant land who have never attacked me.
(I will be talking more about how to do this in upcoming installments of my Move Out of the Country series at this blog.)
If that still doesn’t work, rich people take the third option and just move away to somewhere where they won’t get taxed as much. This happens constantly. Recently, the entire government of New Jersey went into panic mode because one billionaire got tired of paying all the New Jersey taxes and moved to zero-tax Florida.
“We may be facing an unusual degree of income-tax forecast risk,” Frank Haines, budget and finance officer with the Office of Legislative Services told a Senate committee Tuesday in Trenton.
New Jersey relies on personal income taxes for about 40 percent of its revenue, and less than 1 percent of taxpayers contribute about a third of those collections, according to the legislative services office. A one percent forecasting error in the income-tax estimate can mean a $140 million gap, Haines said.
Left-wingers always forget that they are hugely reliant on those rich people they hate to pay for all of their bullshit government programs. As you can see above, less than one percent of taxpayers in New Jersey contribute a third of the income tax that government needs to spend on their inefficient, bureaucratic, unfair welfare state programs. So one billionaire moves away, and government politicians start getting very nervous.
New Jersey residents bear the country’s third-highest tax burden, according to the Tax Foundation in Washington. Along with the nation’s highest property taxes, it’s one of two states that levy both an estate tax on the deceased and an inheritance tax on their heirs. The income-tax rate for top earners is 8.97 percent.
Yep. That’s why rich folks are leaving New Jersey. I would too, and again, I’m not even “rich.”
Left-wingers read this stuff all the time and yet it never sinks in. They continue to think that guys like Bernie Sanders can jack up taxes on rich people, and the rich people will just happily hand the money over.
Nope. They’ll just leave. Or at least their money and/or businesses will leave.