Sweden, France, California, Washington state and NYC have discovered once again that taxing the heck out of rich people causes them to leave.
And when they leave, they take their spend/invest/hire money with them.
And when they leave, they take their spend/invest/hire money with them.
I know other people with 8 figure fortunes who left, too.
I didn't know it was controversial that spending a lot of money in a local economy makes it more prosperous, and when a big spender leaves, the local economy goes down.
The Rust Belt is an example of the latter.
Do these people really spend a lot of money in the local economy? Realistically, even assuming they pay a couple dozen people $100k/year for service and indulge daily in 3 $500 meals, what will be the actual influence on the local economy?
> The Rust Belt is an example of the latter.
The Rust Belt is an example of what happens when the state allows companies to leave, build their gadgets for a tenth of the price across the Pacific, then sell them back home without serious tariffs; not an example of what happens when Mr. Studebaker or Mrs. Bethlehem Steel leave for Florida.
> the state allows companies to leave
If you have to build a wall around your state to keep people from fleeing, you have failed.
It's not really about building a wall around your country to keep people from fleeing, but to prevent gadgets sold by people leveraging arbitrage in an unfair way to get in – or, as we call them for now millenia, tariffs.
For example, consider Bob and Fred. Bob is good at hunting, but stinks at growing blueberries. Fred grows luscious blueberries, but he's likely to blow his own foot off when hunting.
Bob brings home twice the meat he needs, and Fred grows twice the blueberries he needs, and they trade.
They are both better off than if Bob and Fred each only fended for themselves.
BTW, back in the 80s, my (British) partner at Zortech noticed that boxed software in Britain sold for twice as much as the same box in the US. So he would order large quantities of boxes from the US, mark them up, and sell them locally at a nice profit.
Eventually, other businessmen caught on and this no longer worked.
That's arbitrage in action. It benefits consumers.
On the short term and reasonable spatial scale; sure. What's currently happening in the West is that common people are discovering that on the long term and at world scale, it does not really benefits them for a myriad of reasons, among which unevenly applied norms, difference in regimes, different social models, etc.
How is Bezos extracting money from the middle class?
You were wrong about the Rust Belt, and it's OK to admit that and move on.
To put it another way: From Poe's Law[0], we know that no matter how outlandish a position you take sarcastically in a forum like this, there's nearly guaranteed to be people who will be taking such a position in full sincerity. If you don't clearly indicate in some way that you're being sarcastic, you're going to be mistaken for the real asshole, because your tone of voice does not come across in plain text.
Next time, just put a /s and save everyone the trouble, hmm?
> If you don't clearly indicate in some way that you're being sarcastic, you're going to be mistaken for the real asshole, because your tone of voice does not come across in plain text.
That's the sign of goooood sarcasm. Most people don't take internet forums as seriously as you seem to.
It's called the "Rust Belt" because it's where we had booming local manufacturing (the iron) in the postwar years that gradually declined over the course of the Cold War (turning to rust).
Hell, by 1995, some parts of the Rust Belt were already starting to recover, though others remain hollowed out to this day.
I see people moving to other states as a form of load balancing.
The taxes they pay into the local economy have produced obvious civic booms in places like Redmond and Bellevue.
BTW, the Ferrari dealer moved to be close by the Microsoft campus.
Didn't work out too well for the commoners.
Unfortunately Macron got rid of it a few years ago and replaced it with something that only applies to real estate.
If it were EU wide it might work somehow but with so many ultra rich high in politics there is no way this could happen. There is always going to be tax haven countries taking advantage of this situations.
New French gov will want to reintroduce these taxes but i think they have to find different ways.
We also don’t tax rich people more in relative terms, it’s just that it creates a threshold level of wealth where you can choose to move.
Source? I hate paying taxes.
So no, it's not just US Republicans, please stop.
Rich people here pay a flat 30% tax on capital gains so they usually pay less taxes relative to their income than a salaried person earning >45-50k SEK.
There's no wealth tax in Sweden.
I don't think you know much about Sweden's tax system (or even in general) given this comment.
[0] https://en.wikipedia.org/wiki/List_of_countries_by_number_of...
And same goes internationally, if all countries would enact laws against money laundering, or at least enforce it, then the rich wouldn't so easily move their money around.
Just because they can avoid taxes doesn't mean it is the governments fault for having taxes.
If California taxes people and businesses at insane levels, maybe we shouldn't replicate insane level of taxation everywhere else in U.S., on the off chance that it is not, in fact, an optimal level for generating wealth for the people.
Maybe Texas and Florida should be allowed to enact competing taxation schemes so that we can see which one is better.
And maybe Americans should have a freedom of movement within U.S. without having their private property confiscated by the state when they try to leave.
The justification for taxation based on residency is that you use commons like roads and school and police that the government funds so you need to contribute to funding those things.
What exactly is justifications for hitting people with more taxes when they try to leave the state?
To your argument. I guess it depends on 'fairness'. Sure, the deep south can 'Choose' to lower taxes and have really bad schools so that their un-educated population will be unaware, and un-questioning, of any risks when they to go work for the local chemical company or paper mill. This is a valid choice, lets make our people cannon fodder to lure large chemical companies to our state, (and bonus get some kick backs). But, the kids didn't choose this, they were born into it. (which maybe is why they are also anti-abortion, we can't loose our workforce).
There should be some national standards to keep some states from a race to the bottom.
I should be able to give up citizenship or move to another country and pay a cent to the US government.
It's a choice being made to limit someone else's access to resources and information, after all, including the kind of information that would give them the tools they need to understand how much you're screwing them over.
This is nonsense. California is the strongest state in the union economically, with one of the highest quality of life and income per capita. We have an affordability crisis that is related to the topic at hand - billionaires hoarding wealth and driving up the cost of living - but that's a national problem that California can't solve on it's own. Our taxes pay for the things that enable our success - roads, power, dams, parks, libraries, and all that other good stuff.
Meanwhile Floridians can't use their beaches due to red tide and dumping tires in the water. The people of Houston JUST got their power back yesterday a week after a mere Category 1 hurricane. Maybe they should raise some taxes and do something about that so their cities stop losing economic productivity multiple times a year...
1) California is so popular because it has beautiful weather and natural resources. A group of monkeys could govern the state into prosperity.
2) California has also had the highest number of power outages amongst all states.
Reagan, as part of the deal to lower the top rates, traded away those tax shelters.
The thing about tax shelter investing, however, is they only make sense as a tax shelter. They are poorly performing investments otherwise. A tax policy that encourages poor investments is not a good policy.
Keep in mind that the government in the 50s was far, far smaller than it is today. Funding the vast growth in government is inevitably going to get sucked out of the middle class.
And where US gov grew? Army. Where that money goes? To few weapon contractors = to ultra rich. Its not like US put those investments in some other pocket than top 10%
The only thing that matters is what the effective rate was. They could create a 100% tax bracket but if nobody paid it, it's just words in a book.
Musk famously decamped from California to Texas. Bezos from Washington to Florida.
These kinds of objections always come up. "But, rich people are oh so clever, and they will exploit loopholes in any law that gets written!" Well, write stronger laws. Don't include exceptions. Lawmakers need to think more than 5 minutes about what kinds of options/resources are available to people, and how those people might game their way into getting around the spirit of the law.
Ex post facto laws are illegal.
Even so, you might get the taxes once, before they leave. That's not a plan for a future.
And, It's not like they're all going to leave. Sure, a few grumpy ideologues like Musk will Go Galt and move away, but it's not like everyone subject to the tax is going to suddenly leave. People have been predicting the demise of California, New York, and so on forever, yet somehow, they have not all moved to Texas yet, and we still have plenty of high-earning taxpayers here. Maybe they like clean air and a functioning power grid, I don't know.