When countries (and, as we have seen, states) raise taxes on “the rich,” the rich have been escaping to jurisdictions with lower taxes. Thus, ever since Maryland has increased taxes on its wealthiest citizens, those citizens have been moving to lower-tax Virginia. The co-founder of Facebook has renounced his American citizenship and is now a citizen of Singapore. This is happening in other countries as well.
So our Secretary of State Hillary Clinton is calling on all countries to raise taxes on the rich so as to give them no place to hide. From The Motley Fool‘s Rich Smith:
A rich guy can always decide to “pull a Facebook” — follow in the footsteps of Facebook (FB) co-founder Eduardo Saverin, renounce U.S. citizenship, and fly away to someplace with a more lenient tax code. (It’s not just U.S. citizens going this route, either. Last month, Bernard Arnault, France’s richest man and the CEO of luxury-goods maker LVMH, responded to French plans to hike taxes on the rich by emigrating and seeking Belgian citizenship.)
Enter Secretary Clinton, with a novel solution to the problem: Tax everyone, everywhere, and especially the rich.
Clinton first floated her proposal at the Clinton Global Initiative conclave in New York last month: “It is a fact that the elites in every country are making money. There are rich people everywhere, and yet they do not contribute to the growth of their own countries.”
So far, mainstream commentary on the speech has painted it as a simple expression of the American-centric worldview: We think raising taxes on our richest 1% is a pretty keen idea, and you other countries should, too.
But there may be something more subtle afoot. The real purpose behind Clinton’s salvo could be to send a shot across the bow of would-be Saverin and Arnault imitators: If you think you can avoid higher taxes by simply switching citizenship, think again.
I don’t understand this part: “There are rich people everywhere, and yet they do not contribute to the growth of their own countries.” Really, Hillary? Rich people do not contribute to the growth of their countries? You think the only way countries can grow is for the government to rake in more taxes? You don’t think economic growth has anything to do with people having money? But if you do believe the rich are such shiftless, lazy freeloaders why should any country want them to stay around? (Notice how some liberals look at the rich the same way some conservatives look at the poor!)