The only thing more stunning than the kleptomania of tax-hiking politicians is their unswerving faith that taxpayers, especially wealthy ones, simply will smile and surrender even more of their money. This fundamental misunderstanding of human nature is impervious to mounting evidence that taxpayers go where taxes are low.
French President Francois Hollande thought he could impose a 75 percent top tax rate and simply watch revenues flow into Paris like the Seine. Instead, actor Gerard Depardieu rushed into the loving arms of Vladimir Putin and Russia’s 13 percent flat tax. Former French President Nicolas Sarkozy, of all people, reportedly may move to London to escape Hollande’s thievery. Potential fraud charges also may fuel Sarkozy’s wanderlust.
Last year, a record 1,788 Americans renounced their citizenship, mainly in favor of countries with lower taxes and friendlier political rhetoric.
Golf great Phil Mickelson generated headlines this week when he suggested that high taxes might drive him from his native California or perhaps America.
“There are going to be some drastic changes for me,” Mickelson said.
“If you add up all the federal (levies) and you look at the disability and the unemployment and the Social Security, and the state, my tax rate’s 62, 63 percent.” Imagine keeping just 37 cents of every dollar you earn. Is that a fair share?
Before President Barack Obama, Washington Democrats and even some invertebrate Republicans boost taxes any higher, they should read “How Money Walks.” Author Travis Brown demonstrates how Americans between 1995 and 2010 shifted some $2 trillion in wealth by abandoning California, Illinois, New Jersey and other high-tax states and unpacking in low-tax states such as Florida, Nevada and Texas.
“After spending several years mapping and analyzing these data, one correlation keeps popping up: Income moves to where it is most welcome, tax-wise,” Brown writes. “Money walks because opportunity talks.”