Saturday, April 6, 2013
Why high taxes is a bad idea-2
Does the French government know that it does exist in on an isolated island that its high taxes will not force some of its rich people and companies flee despite being patriotic. One thing is for sure that money knows no patriotism (and countries have learned it the hard way). I know long time ago, the taxes on individuals used to be too high but those times were simple and everybody had high taxes but in this new age, where every country is competing for those elusive dollars and foreign investment, wouldn’t you be surprised that some of the rich will depart for less high taxes safe havens. No wonder there are so many tax havens where the rich park their money so as not to be taxed out of their money. Taxes are not a forbidden fruit. Everybody has to pay their fare share, but who decides what the fair share is? Is the government coming under the populist pressure, decide arbitrarily that some very high tax rate is the fare one and just implement it? I believe that any tax rate above fifty percent or even 45 percent is outrageous since it is not only the direct taxes that the rich have to pay but also indirect taxes which can push the effective tax rate above 45 percent sometimes and if we were living in a world where you cannot park your money in a safe place and the taxes were high everywhere, then it would have made some sense since you did not have any place to go but in the present world that is not the case anymore and high taxes can make rich people run to the next country offering them safe haven for their money.