Leave what? If you don't give up your citizenship you owe the same taxes to the US no matter where you go. If you are in the tax bracket you are talking about you will have to pay 10 years US taxes after you leave and give up citizenship. If you are rich enough the IRS can refuse to accept your renouncing your citizenship and say you owe US taxes forever.
It's impossible. The only way you can actually take your money and leave is to convert all your wealth into paper currency and KEEP it in US paper dollars. Otherwise no matter what you do with it, you're still contributing it to the pool of capital.
The Ayn Rand solution is just pure stupidity from people who have absolutely no clue how the economy works.
The majority of people who flee the country would probably sink their money into government bonds. This would both lower interest rates and provide the government with capital to spend into the economy. Some people might sell dollars for foreign currency, but this doesn't really accomplish anything either since the new owner will have to put dollars into the same dollar denominated assets.
To the extent that rich people liquidate their capital assets before leaving, it would depress the price of everything involved in wealth creation and be a gigantic boom to the economy. Imagine a fire sale on delivery trucks, sheet metal stamping machines, store fronts, coal mines, timber leases, and office space.
Thousands of marginal small business ideas would suddenly become viable. People would be able to work again. Markets would open up that were previously dominated by imports. It would be wonderful.
So seriously..........if you're a billionaire Republican, GET OUT! Sell your shit and go somewhere else.
Would the US really take a major hit economically or would average Americans step in to fill the gap?
Aside from financial capital, there's intellectual capital. It's worth remembering that few ideas are truly unique. Nearly all the major innovations were developed in parallel and we only remember the guy who came in first and not the other guys who was a week behind.
So if the current movers and shakers want to live in some sort of self-imposed exile in which the most competent plumber in the phone book is Donald Trump, that's OK. The rest of us can get along fine.
They don’t have to ‘get out’…they just have to get their money out/assets out. Gone are the days when capital was tied up in conveniently ‘hostage-takeable’ immovable assets like factories that governments can take or merely threaten to take in order to extract rents…er, ‘taxes’ from the capitalists. Nowadays a lot of wealth is more intangible and very, very portable.
For example, if they have the right brokers/lawyers they can trade their Apple stock directly for Apple ADRs listed in New Zealand’s exchanges.
I can see my long explanation went right over your head.
Dollars are not capital assets. Dollars are markers for capital assets. Feel free to pack up a coal mine or a corn field and move it to New Zealand.
Let me look for that address, where Iwog should send all of his worthless old unwanted dollars. brb
As I said, dollars are MARKERS FOR ASSETS and therefore have value just like assets do. I can borrow money against my home and take that money overseas, however someone will continue to live in that home and gain value from it.
The fallacy is in assuming that you can simply take your ball and flee the country so no one else can play. It doesn't work that way. Removing dollars doesn't harm the economy, in fact much of our economy is currently dependent on people removing dollars, or removing bonds which are nothing more than paper markers for paper markers for assets.
shows how total private household/business debt was ~$15T coming out of the 2001 recession, and in the 2003-2007 boom it went up to ~$25T.
Ten trillion of new debt in just six years. That's $1.5T/year, enough money to fund THIRTY million jobs during this period, one-fourth of the workforce.
The top marginal rate is neither here nor there compared to these massive credit flows, but you wouldn't know that from watching the financial analysts. Even Krugman doesn't include the ponzi debt angle in his analysis.
For something to be so blindingly obvious yet totally ignored is really reallly odd.
Even Krugman doesn’t include the ponzi debt angle in his analysis.
For something to be so blindingly obvious yet totally ignored is really reallly odd.
It's because Keynesians look at debt as just somebody else's savings, i.e. deferred spending. If somebody borrowed $1000, somebody had to save it, right? Instead of spending $1000, I put it in the bank and somebody else borrows it to run up a $1000 credit card bill. No change to aggregate demand. I spend $1000 less, and the the person with the credit card spends $1000 more. Likewise, when debt is deflating it makes no difference to aggregate demand either. Paying back debt means somebody else is getting extra income, right?
Of course they are totally wrong, and for some reason they don't get that you don't need savings for debt.
Consider: If I run a tab with the bartender, and run up a $1000 tab with him, I've added $1000 to aggregate demand. But where was the savings? Who had to defer spending of $1000? Nobody. When I start making $100/week payments to him that is $100 extra spendable income for him, and $100 less spendable income for me, so there it is a wash as far as AD is concerned.
And look at the US corporations, all flush with "cash". It's really just a that we've been running a tab with them. But the banking system gives the illusion of all those IOUs being cash.
Sigh. Very, very little hard assets of that kind comprise the total aggregate assets in the economy any more. As I said, as you failed to disprove but decided to ignore anyway as if I didn’t say that.
Typical Iwogian slight-of-hand BS
You can say it til the cows come home, but you'll never actually support it. Someday you'll learn that people don't really care what you say. They only care about what you can demonstrate by using logic, historical context, and facts.
I demonstrated that there are plenty of productive assets that cannot be moved overseas. The logical response would be a list of productive assets that CAN be moved overseas. Good luck with that!
In regards to american coporations this has already happened and has hurt the ecomomy take GE for instance which made several billion in profiles but paid zero taxes. A friend of mine mention that Peter schiff made a comment that if the corporate tax would lowered or some type of incentive to attract companies back to America. From this there would some job creation and the people would earn money and pay taxes and the Federal government would then get additional tax revenue this way.
I'm all for a zero % corporate tax rate. Corporations are legal fictions and taxing their profits is silly.
Some mix of 10% flat tax, 5% retail sales tax, 5% LVT, 20% social welfare (FICA/Medicare) would be my preferred policy.
A friend of mine mention that Peter schiff made a comment that if the corporate tax would lowered or some type of incentive to attract companies back to America.
this is facile. The upper middle class labor rate in China is still $5/hr. Working class is $2/hr. No amount of tax policy is going to address this basic imbalance.
Ireland tried being a low-tax tiger the previous decade, didn't do them any good.
Germany has high taxes, they're doing OK.
The key thing is to pick your taxes wisely.
"In my opinion the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago.
"The next least bad tax is a flat-rate tax on income above an exemption. I could design my ideal tax system it would contain an income tax, but it would not be the kind of monstrosity we have now. It would be a flat-rate tax on all income, from whatever source derived, less only a personal deduction and strict occupational expense, and that kind of income tax I think would be the least inconsistent with a strong free enterprise system. "
>What might work is a tax holiday for companies that never repatriated wealth (mostly from Europe) over the last 70+ years. That will be a LOT of money coming back in. Quite a bit would be invested here one way or another.
The essential conceit of "Galt" is that certain sorts of people are utterly irreplaceable.
"The graveyards of the world are full of indispensable people" - Charles De Gaulle
Maybe if all the Old Money Dinosaurs moved out, the mammals would fill the void.
You pick up your bags of money and move to a private island and then... what? You sit there spending it on your island? Fine, drop out. You pay no taxes but have to live somewhere that gets pretty dull after a while and has few resources. Meanwhile back home some other primate has taken over your empire.
The fact is no place else with a high standard of living has as low of a REAL tax rate after all the shortcuts are counted.
It did them a great amount of good until they went insane speculating on real estate.
Can't disagree with that I guess since I also think taxing corporate profits isn't that great an idea.
Real Estate speculation is a natural part of any economy, since real estate is 20% or so of the cost of living, and is thus the dominant expense in most people's lives (though paying for government is right up there, LOL).
What people supposedly should be paying according to the tax tables in the upper brackets, is not what they are paying. As one example, Warren Buffett is in effectively a lower bracket than the lowest-paid secretary, only paying around 15%. Richy Rich knows he doesn't REALLY have to pay 35% or whatever, that's only a theoretical number that maybe a lottery winner has to pay. Most income of people with lots of assets does not flow to them as straightforward income. Why do you think CEO are always hired at some high but not stratospheric salary but with gobs of options and benefits many times that figure? The tax code is riddled with ways to achieve paying almost nothing, yet of course still reaping all the benefits. One of the more clever examples, Hank Paulson went from Goldman Sachs to Treasury. In the process Hank had to unload 500 MILLION in stocks in order to avoid conflict of interest. Now you and I would have to pay at least 15% on the capital gains, he paid ZERO. So if nothing else a tour through public service after Wall Street lets them evade taxes that "little people" have to pay.
So if nothing else a tour through public service after Wall Street lets them evade taxes that “little people” have to pay.
I agree the tax code is screwed, but it's not tax evasion when you legally follow the tax code to lower your taxes. Tax evasion is illegally hiding income to avoid paying taxes. Warren Buffet is simply taking the gift granted to him by politicians whoring out for campaign contributions.
Also income tax (distorted as it is) is not the only tax. The US has a whole plethora of taxes that many other countries don't. State taxes, local taxes, sales taxes, fees of every description, FICA. Even with all the inequities in the tax code factored in there are still plenty of places world where there is a high standard of living with lower taxes than the US. I pay less in total taxes in NZ ( I have sat down with a calculator on this) than in the US and get more for my taxes including very good health care and NZ's version of SS. My income tax rate is 33% vs 28% bracket in the us and 15% sales tax vs 7% in NJ my current home of record. BUT I don't pay FICA or state income tax or local taxes or fees and property tax is very, very low since schools, police, fire, etc. are national therefor are paid out of income taxes.
I lived in France and taxes were about a wash. But that was 20 years ago, I don't know about today. There are places in South America (I'm really looking hard at Chili for many reasons), parts of the middle east, in Europe, Asia, and even a couple in Africa that I would live that have both a reasonably high standard of living (again it depends on your definition of high standard of living, if you want 500 channels on cable, fast food on every corner, and a mall every 2 miles then forget it) and lower taxes than the US.