Where Will Taxpayers Hide?

Forbes ^ | 5/29/2008 | Rich Karlgaard

[bruinbirdman]

What will happen to the U.S. economy if Barack Obama wins the presidency and he's backed by a filibuster-proof majority in the Senate?

Taxes will go up. Capital gains and dividends will bypass 20% on their way to 25% or 30%. Income taxes will go to 40% for higher earners and possibly more for the "super-rich." The ceiling on payroll taxes will rise to $150,000 or so.

Government tax receipts won't grow at all. The highest taxpayers, feeling assaulted, will flee. To where?

Some will take longer vacations. If your last earned dollar is pinched in the 60%-plus range by the feds, the state and your city, you'll envy the beach bum's life.

Some will move to smaller cities. If a $150,000 income in Des Moines, Iowa, or Spokane, Wash., buys you the same house and lifestyle as a $500,000 income in Greenwich, Conn., or Palo Alto, Calif., why not move? The tax monster will eat most of that $350,000 difference.

Some will move to entrepreneurship. If you can live with a lower income, you might as well build equity behind the tax curtain and harvest it in better times. That's what entrepreneurs did in the 1970s.

Some will switch careers, become tax lawyers and make the most money of all.

[CaspersGh0sts]

Exactly. The “progressive” tax system in our country has created a subclass of people who bare none of the responsibility of paying for anything related to the government but who reap massive dividends in return.

They collect from the government and pay very little in return. Of course they want more, and they’re definitely voting themselves a pay raise.

One straight out of your pocket.

[Leftism is Mentally Deranged]

Guaranteed that Obama will do all he can to transfer wealth from “rich privileged Whites” to poor downtrodden “have nots”.

[MileHi]

You can trace this right back to FDR buying votes with tax dollars (you don't think republicans in the day were getting those government make work jobs, do you?). And LBJ ratcheted it up for a “great society”.

[Salgak]

Moving to Galt’s Gulch. Using my peasant-fueled SUV. . .

[The Great RJ]

Look back to the 1950’s when the highest marginal tax rate was 90%. The wealthy shipped their money overseas to places like the Cayman Islands and the economy was almost stagnant.

[andy58-in-nh]

Two words: cash economy.

[AD from SpringBay]

If this occurs, it will be because that’s what a majority of the taxpayers want.

I don't know if that's true. Consider the majority of people voting democrat (ie - voting themselves a raise) don't pay that much in taxes, especially income taxes.

[JZelle]

What about Panama?

[Dahoser]

I really never considered the aspect of people who don’t pay taxes and how it would affect their voting like this. Dang, makes me think we should never have people who don’t pay taxes if this is the result.

[realdifferent1]

I'm with you. As soon as I get some business settled that's my plan.

First one there chills the beer!

[redgolum]

You realize that if this really happens, and things get bad, you are at extreme risk.

If the balloon goes up, you are a gringo in a far away place filled with very angry people. Now if you are there long enough that you become part of the community, it is a different story. But there are many ex pats who live in gated communities and think all will be hunky dory no matter what.

History has shown other wise.

[redgolum]

Because those who vote will vote themselves money from the treasury. Every democracy ends this way. We are nearing the end of ours.

[Freedom'sWorthIt]

Hmmm - that’s worth exploring...maybe others know more about Panama....I don’t.

[Gaffer]

Simple...house is paid for, no debt.....great job with lots of money...plan to reduce my percentage of work time to hit the AGI that is the ‘best’ in terms of tax-bite. Rest of the retirement funds will be moved/converted to where I can get at them quickly.

[bootless]

Go, Rich. Good column.

[mart7789]

It is even worse. All those college kids that want Obama and the college money he will give away will actually be out of college and will be paying for this instead of reaping the rewards. If they are smart and get a good paying job they will not even be entitled to the money for their children because they will make too much money and be exempt from this deduction like so many of us are now with the current system. If you get and education, work hard, are successful, make some money, the feds will find a way to get as much as they possibly can. Just look at what deductions you don’t get. In fact, if you make over about $120,000 you did not get a tax rebate check in the mail while everyone else did. And they did not even say thank you.