Trump was just saying the other day that he can't raise taxes on the rich because they'll leave the country, but this real life experiment says otherwise.
Posted by AuggieNorth
Trump was just saying the other day that he can't raise taxes on the rich because they'll leave the country, but this real life experiment says otherwise.
Posted by AuggieNorth
5 Comments
Interesting. Possibly not what one would expect but I’m always open to being wrong. I’d be curious to see if there was a change in the growth rate of million dollar earners as well, basically a “would Massachusetts have had even more million dollar earners without the tax?” hypothesis
The thing about millionaires is that they can, and often do, pay for things that are desirable. If living in MA is desirable for its healthcare and education and low crime, its not *that* surprising to me that wealthy people would be willing to bear an additional tax.
Still on the left side of the laffer curve
40% more when it would have been what otherwise?
You would expect the amount of people earning more than a million to increase a lot faster than inflation.
So… the more common formulation is “can’t tax *wealth/assets* or else…” It isn’t generally applied to income. Tiered income tax exists and is quite normal.
Generally speaking though, the US can do a “billionaire” tax better than most countries. It’s a lot easier for most millionaires to migrate from Paris to Brussels.
Also… US tax jurisdiction is a lot harder to shake. In most countries, when you open a bank they explicity ask about your US citizenship and/or tax status. Also the US has controls on all its borders. France doesn’t know what side of the border you spend 24 or 26 weeks on.
Not a lot of America’s wealthiest are likely to give up citizenship and totally bail.
Imo it’s a messy issue, but answers are not as categorical as sometimes presented. It is, I believe, to have a ruleset where the wealthy pay taxes.
There is a broader economic question about whether and when you want them to pay tax. Taxing the top tier of wealthy people has a very different economic effects to taxing the upper-middle class.
Wealth creates demand for investments. Stocks, bonds, bitcoin, real estate, etc.
Say we do a one-off, “tax event” for CGT liabilities. Everybody owes the full 20% for all unrealized capital gains on May 1st. Warren Bugget would be mostly off the hook. He has realized gains and paid cgt over the years.
Musk, Bezos, Zuck, Thiel and most other famous ultra-rich would be liable for approximately 20% of their current net worth. They’ve never realized gains for tax purposes… and likely never will.
So let’s say that raises $1trn. We give that $1trn to normal income tax payers via one time tax cut. This would reduce income tax by about 50%.
It’s technically “neutral” but irl we would probably see a significant increase in the price of goods and a decrease in the value of investment assets like stocks and bonds.