Mayor Bloomberg voiced a warning recently. He cautioned New Yorkers about forever raising taxes on the rich. Whether you like it or not, he said, the rich are mobile.
And when they move, they hurt the government that has badgered them with the higher taxes.
This is true in France. The new socialist leader there wants to raise taxes a lot on the biggest earners. And those big earners are lining up to flee to Switzerland and Belgium and other countries.
This is predictable because the rich have done this for centuries. All over the world. Moviní on out is one of the privileges rich people enjoy. They donít have to grin it and bear it. They donít have to worry if they can sell their house or find new work.
Britain made a sport out of gouging the rich in the 1960ís and 70ís. By the time Margaret Thatcher arrived on the scene the UK was starved of investment. The rich refused to invest in much in the UK because the taxes on their returns were insulting. So they shipped untold billions out of the country and invested it elsewhere.
And big earners simply moved out. To avoid the income taxes on their big earnings. For instance, virtually all of Britainís major authors fled to Europe. Because Britain was sucking up so much of their royalties.
Lots of haters of the rich grow smug when they see the rich get whacked with heavier taxes. Smug doesnít buy the groceries. When the rich depart, the cities and states and countries that took in tax money from them lose out. The smug rich-haters end up paying more. Or receiving less. Because the rich ainít around to gouge any longer.
Canít happen here? Look at California. It is bleeding high-earners. They are leaving by the thousands. The state is losing businesses by the thousands. Lots of them are moving to Texas for the lower taxes there.
Mayor Bloomberg is worried because New York City has been losing thousands of big earners. They are being replaced with people who earn a lot less. And who will pay a lot less to the city in taxes. The mayor tried to sober up the rich-haters with a simple fact. He pointed to the top 500 super-rich folks of the city. They cough up 15 percent of the tax money the city takes in.
If you want a good example of a tax loss, consider one guy who owns a big company upstate. He lived upstate all his life. New York brought on a tax increase for the rich. It would cost him an extra million per year. He moved to Florida. He saved $13,000 per day on the taxes he would have had to pay to New York State. The state loses out on $4.8 million of his per year. That is a lot of money for the state to lose. And this gentleman was not alone by any means.
This ought to give pause to the rich-haters when they cry out for more taxes on the rich. But it doesnít. The leader of the group that had pushed for the tax called the guy who moved to Florida a deserter. He said ďItís a disgrace that this is how he pays back the stateÖthatís been so good to him.Ē
The essence of smugness. The disgraceful deserter had given over $100 million to schools and hospitals and charities in the state. He had created a business that gave jobs to 12,400 people. They, of course, pay huge taxes to the state. As does the company. As did he Ė about $3.4 million per year. Does that sound selfish to you?
Now that he lives in Florida, I have to wonder whether his giving will be directed less to New York causes and institutions.
The rich represent a take it and leave it situation. Take too much from them and they leave you. When they leave you, it costs you.
From Tom ... as in Morgan.
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