Posted on 07/05/2002 8:04:38 PM PDT by Action-America
" gooder understanding " ?
They can't carry out but so much "cash" at one time.
It's obvious that you have not been around many wealthy people or taken any economics courses (that you passed), or you would know just how stupid that statement is.
To begin with, really wealthy people seldom do anything with cash. Most have taken the advice of the financial advisors, who generally suggest that if you have a lot of money, at least half of it should be invested offshore. When the wealthy leave, there are many very easy ways that their remaining wealth can be transferred offshore. In fact, some of the methods available can even be a legal write-off on their last income tax filing. Creating offshore debt is one of the more common ways to move money. If an offshore entity owes you 100 million dollars before you leave, that entity still owes you 100 million dollars after you settle in Bermuda, Ireland, Belize or the Caymans. The note comes due after you have settled elsewhere. Voila! Limitation avoided.
To do it all legally requires a bit more work, but there are indeed, many legal ways to move large amounts of money between countries. Wealthy individuals and corporations do it every day. Of course, Congress is busy trying to create new laws to limit how it can be done. But, it is those laws that are responsible for the capital flight that we have seen so far.
You even find that when they leave, the wealthy leave nothing of value behind. You will discover that their house is owned by a foreign company that has it mortgaged to the hilt at some foreign bank. If you want to buy the house, you, not the billionaire, will be the person that is sending the money offshore to pay the foreign owners. Other properties, such as factories and office buildings, will be similarly encumbered. If the US government should suddenly refuse to enforce those foreign debts, our international credit rating would collapse and our markets would go in the toilet over night. Even the greedy, power-hungry people that we have in Congress are not so stupid as to risk that.
In fact, you can be sure that if a billionaire wanted to move 20 billion dollars or so offshore, he could probably do so within 9 to 12 months - LEGALLY. And once it's gone, it will be a long time before the US sees any of it again. In fact, since many products that were once produced and sold in the US will be produced offshore, it will mean that more and more money will be going offshore as Americans continue to buy those items. It isn't a pretty picture.
Goodnight, dear parsy; sweet drfeams. : - )
Interesting response, on this supposedly "conservative" forum... and not just from the resident Marxist, "parsifal". Class Warfare at it's finest.
If Demidog will supply the Bread, I bet we can get Nunya to scare up a Circus. And, as the loud-mouthed Christian in the group, I graciously volunteer to provide the Entertainment as soon as we can corral some suitable lions.
Hail Caesar!! We who are about to die, salute you....
Suitably distilled, that is.... beer is liquid bread, it's good for you...
I give it a 14.
Why did the Billionaire cross the Border?
Because the Taxes were too high.
If you slap Tariffs on top of Domestic Taxation, all it means is that after high taxes have destroyed your Domestic production base, the Tariffs mean that you can't import anything either.
In all of human history, there has never been a Nation which has Taxed its way to Prosperity.
The Zambonians will either keep the loot in Zambonia, thus lowering our money supply and increasing the value of the dollars that you and I have, or the Zambonians will send it back to the US where it will still fuel our economy.
ECON-101
If the billionaire creates jobs in another country, the people in that country won't be sending money back to the US. They will be sending product back to the US, which will be paid for in US dollars - dollars that will be sent offshore to pay those foreign producers for their work. The effect is a net out-flow of wealth. If you think that our trade deficit is bad today, just wait until there is no money to fund business expansions and retooling in the US. With a glut of dollars flowing offshore, the value of the dollar will take a nose-dive.
The only hope of preventing that is to keep the wealthy here. The people in Congress know that. That is why they are so busy passing laws trying to force the wealthy to stay or punish them for leaving. The problem is that in their lust for power, they have chosen to use a whip rather than a carrot and history has shown us repeatedly, that only reward, not force, can keep wealth from leaving any country.
(BTW, isn't Zambonia where they make the famous Zamboni Ice Rink Machine?)
As you suggest, the "Brain Drain" is a problem. But, since you only have to make about $120,000 per year to be in the top 5% of income earners and most PhD's (other than teachers) and other high level researchers and engineers make well into the 6 figure range, we are probably talking about many of the same people. Furthermore, since over 36% of our taxes are paid by the top earning 1%, if only that top 1% (roughly 1.2 million) should leave, it would mean that those who remain would face a greater than 55% tax increase, just to stay even.
At the current expatriation rate of about 100,000 per year, that could easily happen in 12 years. But, since the expatriation rate has been growing in recent years, the laws that are driving expatriation are getting more sinister and the media is beginning to take notice, the expatriation rate will probably continue to increase and the top 1% could easily be gone in as few as 5 years. Regardless of how fast it happens, as the people who pay the lion's share of the taxes leave, that enormous tax burden will fall upon the poor and middle class.
When taxes go up, productivity goes down, which results in lost jobs, which in turn, results in more people on welfare, which forces taxes even higher, which results in lower productivity, which results in lost jobs, ...
Of course, if you are a Marxist, you believe that all jobs emanate from government and that only those in government should be allowed to have lot's of money. In that case, you aren't alone. There are about 534 people in Congress who agree with you. But then, that's why things are going south so fast.
In fairness, we should adjust the "12 year" stats a little bit to reflect the fact that some new Domestic billionaires are still being created, but still --- My careful econometric analysis follows:
Earlier today on FR, I advised a Bush-Bot that I had little more desire for GOP "slow socialism" than I had a desire for DemonCrat "fast socialism".
But come to think of it, maybe I am a naive goon. Maybe the Kennedy/Bush "education" bill will finally hammer it through my thick skull that, much as I appreciate "rear-guard" conservative actions like those of the Republican Liberty Caucus... GOP "slow socialism" is -- when they are the Party in Power -- pretty darn fast.
What floors me here is the unbridled envy being displayed by so many towards those who have earned such fortunes. Just unbelievable........
Laugh it up.
Marx would be proud.
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