Europe has repeatedly tried to soak the rich, and the results are always the same: the rich move their wealth somewhere else and you end up breaking even or even reducing your tax revenue.
Explain to me the benefit of attracting the wealthy if they don't pay tax?
Come to our country - have our police and courts and soldiers protect you wealth - all for free.
Oh - and because you are not paying tax - can I borrow some of that wealth please so I can pay for the stuff I'm providing for you free - I'll give you a healthy return.
The rich benefit the most from civilisation - and it costs - you can't just keep running from country to country hollowing it out for ever - eventually there will be nowhere left you can free ride.
Oh and in terms of the charts where you increase a particular tax and revenue goes up in the short term and down later - that's because people adapt - they find new ways to avoid tax ( yep including to pretend to have left the country ).
Just bwcause they run, that's not a reason to stop pursing them.
> Explain to me the benefit of attracting the wealthy if they don't pay tax?
You've fallen victim to the false dichotomy. I don't see anyone argue the wealthy shouldn't pay any tax at all.
This renders the 2nd paragraph wrong. And then 3rd paragraph wrong too.
> you can't just keep running from country to country hollowing it out for ever - eventually there will be nowhere left you can free ride.
Depends how much time it takes to run from one country to another, and what you mean by "for ever" - if it takes you a year to move from one country to another and you live for 100 years, you need 100 countries. Pardon my humorous remark, I know this is not the point; but the actual argument is easier to counter: we don't have a single government for the Earth. We don't have a united dominating force to unify taxes in one civilization and sanction or isolate from the other civilizations for hosting the rich.
IMO the education is poor, producing stupid societies electing the governments which are incompetent, corrupt and largely sympathizing with the rich.
They should pay in proportion to the amount of value they capture - having in effect, much lower margin rates the wealthier you are doesn't help pay the bills or maintain some sort of meritocracy.
And sure - while you could move from one country to another like a parasite finding a new host, and cycle around as the original host recovers - the key questions is whether that results in a few people owning more and more as a result, and paying a lower and lower marginal rate until civilisation collapses. ( or the rich decide to take the rains of power instead to keep the society they benefit from so hugely afloat ).
> IMO the education is poor, producing stupid societies electing the governments which are incompetent, corrupt and largely sympathizing with the rich.
I think you underestimate the level to which the rich judicously share their wealth in order to influence people and policy.
Until they lobby hard enough to have a reduced VAT on luxury goods as it happened in France. The argument being, you guessed it, otherwise they would buy stuff elsewhere.
Your "Swedish" source appears to conclude that the wealth tax is effective, but suffered from loopholes and lack of enforcement. Why not fix those rather than follow your "real plan"?
Also your UK link does not support your argument:
> Weaker-than-expected tax liabilities from additional rate taxpayers are not necessarily an indicator of an unexpectedly low yield from the 50p rate. Incomes for those earning above £150,000 could be depressed for other reasons. For example, high income earners are more likely to derive a higher proportion of income from savings, dividends and other investments – and these have been much weaker in recent years than employment income.
>Europe has repeatedly tried to soak the rich, and the results are always the same:
Yes, the results are always the same: Europe consistently runs lower budget deficits, yet provides greater benefits to their citizens. How awful for them.
They spend less than the US as a percentage of GDP, yes, but they don't spend zero: 2.5% or so vs our 4%. But who's to say they aren't right and we're wrong? Think about the cost of the Iraq and Afghan wars. Good investments?
Isn't it a 50% inclusion rate for capital gains in Canada? That works out to a maximum tax rate of 27% in the top tax bracket. And they canceled the proposed increase to a 66% inclusion rate, which is probably smart considering how a ton of rich Canadians already move to Florida.
The corrolay of this would be that as soon as money enters a "rich-only" ecosystem, it's essentially gone forever for the wider population. I don't see how this would be a desirable outcome.
It creates rich-people dollars and poor-people dollars. The poor people can still afford a buy a few necessities because rich-people money is tied up in useless vain endeavors, at least to some extent. If rich were to direct all their purchasing power toward real goods they could drive up the prices and make it unaffordable for regular people. As happens with the housing market to some extent.
All demand is not created equal. The rich buy more houses than they need for shelter, in order to produce income. This essentially creates an artificial shortage of homes for purchase by actual homeowners. I believe that is what the commenter was referring to.
> Europe has repeatedly tried to soak the rich, and the results are always the same: the rich move their wealth somewhere else and you end up breaking even or even reducing your tax revenue.
Why can't they tax something that _cant_ be moved elsewhere, like property ownership?
Raising taxes generally raises money. In some cases it can lead to capital flight but that’s hardly some universal economic rule.
But besides raising capital, taxation reduces wealth inequality, which is itself beneficial as it makes society more democratic. Reducing wealth inequality reduces the concentration of power, which is better for everyone (except for the 1%).
Still, when redistributing wealth, it’s prudent to address the risk of capital flight. It’s not an insurmountable challenge. Policy can address it through: 1) financial controls 2) coordinated international efforts to raise taxes on the wealthy, and 3) harsher measures like nationalization and capital levies.
Something to point out also is that more equality is actually better even for the 1%. They are just too short-term-focused and greedy to see that. There is nothing they can get today that they wouldn’t be able to get tomorrow if we taxed them appropriately. In return, they would live in a more stable and safe society, a less brittle economy, and wouldn’t be as reviled socially. But they are just too focused on their net worth to see that.
Your links are 2 about speculation on how business will react, and one real paper that discovers that rich people lie more to avoid taxes when your tax rate increases.
Nothing at all supports that "the rich move their wealth somewhere else"
That's because, as a singular planetary species, that story is a myth. The rich only maintain wealth by exploiting people against each other, thus deterring actions against the rich who likely caused the issue in the first place.
Lack of housing because it's a profitable investment class that rises in value due to lack of supply? Obviously it's the fault of NIMBYs alone and not political policy pushed by lobbying groups.
Healthcare too expensive? Totally not the fault of private equity bleeding care networks dry and public health insurance companies denying coverage to fund share buybacks and CEO raises, so it must be nurses striking for pay or the government for paying too little on Medicare.
The point is that if enough rich countries said "fuck this shit, pay up and fuck off out of politics forever", the rich can't leave. They're stuck here, on Earth, with the poors. That's not going to change anytime soon, so the only thing stopping these countries from reigning the issue in is cowardice.
But do you have actual evidence that we need it? (Instead of just "nice to have".) Because everybody just repeats that without evidence, like the OP.
There are plenty of reasons to expect the OP's prediction not to hold. I don't know how things play out in practice, and I don't think I've ever seen anybody that knows it.
The IRS taxes americans no matter where they are or where they take their money. The US is only one of two nations in the world with citizenshp based taxation. And if you want to renounce your citizenship, 35% exit tax. The only solution is to make a foreign corporation (Apple keeps its income in Ireland for example) and hide your money there (The City of London does a brisk business setting up corps in their old colonies - when the IRS comes knocking, the City of London plays dumb)
It's also not that simple for an individual. If you own more than 10% of the corporation you get hit with CFC rules, a base 37% tax on gains. Or PFIC rules if it's passive.
France: https://www.theguardian.com/world/2014/dec/31/france-drops-7...
UK: https://obr.uk/box/effect-of-the-additional-rate-of-income-t...
Sweden: https://eml.berkeley.edu/~saez/course/seimAEJ17wealth.pdf
It's interesting to note that even when these tax schemes were repealed, the damage had already been done and the wealth did not return.
Here's a real plan for America:
Step 1: have a tax rate that's a little less than our peers
Step 2: return spending to pre-Covid rates circa 2019