(01-28-2019 12:25 PM)Eldonabe Wrote: Those with money who hire people will quickly take those jobs and move them to another country. This will be a bigger problem than her trying to "take their stuff".
It is very simple - but very complicated to calculate. Most everybody is willing to pay their fair share but there is a breaking point where you will be pushed to take your ball and go home (or in this case to another country). I think Trump was a little too generous (all be it business/employment friendly) and the rhetoric from the left is that they want to take waaay too much.
If a successful and wealthy person in our country feels like they are being punished for working hard to get to that level of success and wealth, that is where the disconnect will start and end. You cannot have AOC and the like telling you that you MUST support people who will not support themselves. The goes against the very core of how they succeeded - working hard and earning it. It does not mean these people are greedy, most probably have a sense of civic responsibility and love of country to help people in need - but there is a line and until the left can figure out what that line really is, they will constantly step over it.
I am republican red - but I believe in the right to choose and some form of giving back (taxes). If I am going to vote for the lesser of two basic evils - I am going to go with very low unemployment over higher unemployment which adds massive burden to the plight of the poor and the support thereof to sustain them.
And I would argue that the "breaking point" that you describe is defined to a large degree by what other options are available. Am I going to stay here and pay 40% when I have plenty of places where I could go and pay 35%? Some will go, but probably most stay for that differential because of the hassles involved in moving. But what if the differential goes to 70% versus 35%? Now you've got a lot more moving. As long as it's an income tax, you can usually stay and move your income overseas to be taxed more favorably.
But if it's a wealth tax, that's a slightly different animal. If it's worldwide wealth, then you can't just move your money, you have to go too. Some people may not be willing to take on the negatives associated with leaving, but some almost certainly will. And the higher the tax, the more decisions will be made in favor of leaving.
And each one of those forms of capital flight has negative consequences in the form of lost economic activity and lost jobs, particularly high-paying middle class jobs, here in the US.
People say, "We had a 90% tax rate in the 1950s, and 70% in the 1970s, and people didn't bail and we had a great economy." Yes, but... And it's two very big "buts":
1) We had so many loopholes and deductions and exclusions in the 1950s and 1960s that the effective rate was just about what it is today. Indicator: Ronald Reagan (with democrats Bill Bradley and Dick Gephardt) dropped the top tax rate from 70% to 28% in two rounds of tax reforms (to 52% in 1981, then to 28% in 1986) and the amount of tax revenue went up, and the portion of that revenue paid by the "rich" (top 1%/5%/10%, however you measure, same results) went UP (by about 7% IIRC) not down.
2) And this one is more critical, but that led to pretty much two decades of continued prosperity (excluding the 1989-90 S&L collapse). The rest of the world sat up and took note, and from roughly 1995 to 2005, pretty much the rest of the developed world took note and dropped their tax rates drastically. As an example of the kind of thing that happened, Ireland lowered its corporate tax rate from 50% to 47% in 1988, to 43% in 1989, to 40% in 1991, to 38% in 1995, to 36% in 1996, to 32% in 1998, to 28% in 1999, to 24% in 2000, to 20% in 2001, to 16% in 2002, and to 12.5% in 2003, where it has stayed since. Ireland did not drop its personal income tax a corresponding amount, but many countries have dropped both substantially. Another way to get a feel for it, when Bill Clinton got through raising taxes, were were among the lowest tax jurisdictions in the developed world. When GWB got through lowering them, we were among the highest. That's how much everybody else dropped theirs. There weren't many choices about other places to go in the 1950s and 1960s. There are many today, many of them very livable countries.
Because of those two changes, a return to tax rates of the 1950s or 1960s would not produce the same results as we got then. Instead, you would get massive capital flight. Unless, of course, you chose to return to the highly convoluted deductions and exclusions from taxable income that prevailed in those days, and I don't think anybody wants that.
I can move my factory from Pennsylvania to Poland. I cannot move my factory from Pennsylvania to 1965. So if I want to look at the impact of tax changes on capital flight, the valid comparison is to Poland, not 1965.
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