Sunday, May 20, 2012

The millionaires and billionaires are leaving!

Maybe someone can help me understand this better. As I understand it, the founder of Facebook has renounced his U.S. citizenship and has moved to Singapore where the tax burden is not so oppressive. I also understand that hundreds of other millionaires or billionaires have left the U.S. for the same reason.

Rather than taking this as a wake-up call--that is, a warning that says, "Hey dummies, you are losing your biggest taxpayers because your taxes are too oppressive," our Democrat leaders are proposing to take 1/3rd of the wealth (or income?) of anyone who transfers their citizenship from the United States to another country.

Have I misunderstood what is happening? If not, isn't this just legalized theft? If this economic coercion doesn't work, perhaps we could just take a page from some Communist countries and build an "iron curtain" of sorts to forcibly prevent people from leaving the country.

The root problem is that our politicians (Democrats and Republicans) are spending and regulating too much, and our taxes on "the rich" are so high that the very rich are  beginning to leave the country! The Democrat's oppressive solution may may keep some millionaires or billionaires from leaving the country, but it may also, a) incentivize others to "cut their loses", i.e. to leave now rather than have the U.S. take even more of their money later, b) discourage other millionaires / billionaires from moving to the U.S. and c) keep the ones who have left from ever coming back again.

In other words, the problems Democrats create by taking more and more money from the rich to re-distribute to the poor may have the unintended consequences of making the middle class pay more and more of the tax burden (since almost half of the people in America don't pay taxes and more and more of the rich are leaving).

So the Democrats' solution to the problem is not only reminiscent of the oppression applied by Communist countries, the Democrats' solution may actually result in making the problem even worse!

What am I missing?


Kevin said...

I thought this article in the WSJ covered the topic pretty well. I think the US government is very interested in knowing where all if it's citizen's money is and how to get at it if the government wants it.

The guy who left the US, Eduardo Saverin, was a co-founder of Facebook. Mark Zuckerberg is the primary founder and only remaining founder still with Facebook.

It would be interested to see how political figures treat Eduardo Saverin who renounced his US citizenship for financial reasons and US citizens who aided and joined terrorist organizations but kept their citizenship for protection. Which is worse?

Greg Dale said...

The rich are not only leaving...they're dumping stocks and dollars. Look past the taxes. They're leaving before America falls.