If you overtax the rich ---
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Ian Lang
Leading Technician Jul 8
The argument I often hear against “Tax the rich” is that “The rich will move away, and your economy will suffer”. Are there any historical occurrences that can back this?
Yeah, tons of ‘em.
In the Wilson years in the UK rich people paid lots of tax and they
moved out. Both the Beatles and the Rolling Stones (who went to live in
France) wrote songs about it. The practical upshot was that we lost many
of our best business and scientific brains and began a long decline in
which we are still; the first thing Maggie Thatcher did on coming to
power was to cut taxes for the wealthy but it was too late; a deal of
damage had been done.
Sweden dumped wealth taxes in 2007 when it became clear that rich people
were leaving Sweden in droves to avoid the tax. Ingvar Kamprad buggered
off in 1973 and came back in 2014. France shoved on a wealth tax in 1982
and between the year 2000 and 2012 some forty-two thousand millionaires
hopped it.
When they totted it up, Sweden raised five hundred million dollars
(everything is measured in dollars internationally) on their wealth
taxes. But lost a hundred and sixty-six billion dollars in capital
leaving the country.
Unlike me, who works for my money, rich people send their money to work
for them. I’ll go to work anywhere in a radius of about forty miles.
Rich people’s money will go to work anywhere in the radius of the
equator. If you snatch too much from them where they are, they go
elsewhere instead.
Of course, you don’t get this problem under communism. Under communism,
you get a whole different set of problems, but not this one, no.
Which is why a SUDI (Shut Up and Do It Party) government would employ
stealth taxes. And what we mean by stealth taxes is to have HMRC employ
some gentlemen like this:
going round the place in souped-up Ford Consuls looking out for MBAs.
What happens then is that the Consul screeches to a halt and the
occupants rush out and shout “oi! Hand over yer wallet, mush!” and they rifle it for whatever’s in it, and if the “tax-payer” is wearing a Rolex or other such fancy watch then that gets “taken as evidence” too. As an extra the occupants rifle the “tax-payer’s” pockets as we know that the “tax-payers” aren’t stupid and will keep some cash there too. Finally shoes and socks will be examined. We know that trick as well.These
gentlemen will be paid a basic salary plus twenty per-cent commission.
We expect a very large tax take from these activities (and of course
some corruption when reporting the figures, we’d be disappointed if not,
as long as they don’t get too egregious with it).
I blame the EU. Ursula grab der Lootin.
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186 comments from
John Collins
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comments include
John Collins
· Jul 8
Tennis superstar Bjorn Borg was only 17 when he began winning major
tournaments and major prizes. His native Sweden taxed his earnings at a marginal rate of over 100%. He moved to Monaco. Since he was a minor,
Sweden taxed his parents. They moved to Monaco as well.
As economists say “gold knows no flag.” Money will always go where it is welcome.
James Straiton
· Jul 11
What tax had a marginal rate over 100% and what was the effective rate?
Magnus Johansson
· Jul 11
The Swedish marginal income tax rate reached those heights during the
1970s but only for very few people (it was still 70–80 percent for other
high earners).
Unfortunately for the government some of those in the ultra high tax
bracket were famous and popular people, like Björn Borg and author
Astrid Lindgren. The result was bad PR and lots of tax planning. Rates
dropped from the 1980s onwards.
John Collins
· Jul 11
Sweden’s top rate was about 90%. In addition, the self-employed had to
pay the equivalent of Social Security tax (about 7%) but also the “employer’s” Social Security contribution (also ~7%). Bjorg left the country to avoid the tax. Some authors chose to forego their commissions.
In the U.S. under the 90% top rate, almost no one paid it. There were
multiple loopholes and deductions that allowed high-earners to avoid the
tax. The clientele at high end restaurants tended to be those who were self-employed with high incomes. A big shot lawyer could entertain
clients at Lutece and run up a dinner bill for several thousand dollars
for four people. Fully deductible. Cost to the lawyer was 10% of the
nominal tab. When Pres. Reagan lowered
the top marginal rate to 28%, some of the loudest complainers were the
most expensive restaurants.
Tax exempt bonds, long term capital gains, and the granddaddy of all tax avoidance schemes -“safe harbor leases.” Safe harbor leases allowed investors to trade current income taxed at high marginal rates in the
near term to long term capital gains taxed at 15–20% seven years in the future. It turned out that nearly half of all condos were owned as “safe harbor” investments.
Patrick O’Donnell
· Jul 8
When is the last time a poor person gave you a job? It is really that
simple.
or. I once pulled my car over to watch two homeless guys fight over a
corner. They beat each other with sticks. Poor can be just as greedy and selfish. Lastly, I don’t have slave labor. I pay 17 bucks an hour to
start if they have zero experience. Ten percent of my workforce is
making over 150 thousand a year. Everyone is eligible for insurance and retirement if they want. Doesn’t fit your narrative does it? I can be an asshole but I don’t treat my employees that way.
P
Patrick Wiley
· Jul 8
No one “gives” jobs.
Patrick O’Donnell
· Jul 11
I do. I give people a chance via a job and if they can’t do it - I take
the job away.
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