And the reason this should scare you is that what ultimately guarantees your freedom, what ultimately forces the socialists and leftists of the world to spend within their means, what ultimately keeps governments from stealing everything you own is that there are...
OTHER GOVERNMENTS.
In other words the productive people can just decide to move, or even more easily, invest in other countries.
You tax us at 40% corporate tax rate? Well we'll move.
You want to take 50% of GDP to bribe the lazy masses into voting for you so you can have life long employment at the express of the integrity and future of the country? We'll invest elsewhere.
And now those good ol "developed western nations" are doing nothing short of forming a cartel to normalize and standardize tax rates. I don't care about the military, if this happens you will have effectively a one world government and no natural forces of competition to force these countries to spend within their means.
This does however bring up an interesting development I've noticed. Countries like China and Russian, for god's sake, are going to be the ones who are more free than the "free world." Russia already has a flat tax, China has a corporate tax of only 20%.
Any industrious individual would be wise to sow some seeds in these countries.
And any industrious country would be wise to tell the OECD and this tax cartel of nations to ef off.
...except that Russia and China have an additional cost to business: the risk that the government will stop by one day and say, "nice business you have here. We'll take it."
ReplyDeleteWhile that may also be Obama's wet dream, we aren't there yet.
The challenge with U.S. citizens leaving the U.S. to work elsewhere is that the U.S. imposes taxes based on citizenship, not residency. Thus, the only way for individuals to fully escape confiscatory U.S. taxation is to disavow U.S. citizenship. That is a drastic step to take and is not something to be done lightly.
ReplyDeleteNormally, a U.S. citizen is entitled to foreign tax credits for foreign taxes payable to offset any U.S. taxes payable. However, if the overall U.S. tax liability is greater than the foreign tax liability, the foreign tax credits will be isufficient to fully offset U.S. taxes. In effect, an individual pays the highest tax rate between the U.S. and the foreign jurisdiction. Manipulating or reducing the entitlement to foreign tax credits is one means taht the current administration could dissuade individuals from leaving the U.S. for employment purposes.
Are we really in as much trouble as I think we are? Destabilizing rational business prediction models with regulatory uncertainties is going to be very very bad (AIG bonus taxes anyone?). Bill Clinton looks like Abraham Lincoln next to Obama. And this is really not a partizan comment, unfortunately.
ReplyDelete"While that may also be Obama's wet dream, we aren't there yet."
ReplyDeleteKey word being "yet".
There is always the sea, above and below. And space in time. It's a question of who can move faster, the engineers and entrepreneurs in developing self-sustaining habitats or the politicians in their ability to generate the political will to use force to stop private societies from developing.
ReplyDelete