Saturday, June 22, 2013

Capital Flight

Aaron Clarey explains it:

It works like this: you have a business. You're probably located in a physical place like a state. Politicians in that state decide "Let's buy votes by taxing businesses". The taxes suddenly make it unprofitable to conduct your business. So what do you do?

Option 1: Shut your business down. Nobody operates a business to lose money. I don't know why politicians and voters don't seem to understand this.

Option 2: Move your business to a location without the onerous tax, where it is once again profitable to do business.

Either way, the politicians and voters lose. And they NEVER learn. Earlier this year or last year in France, they passed some high tax on the wealthy. And some of France's wealthiest citizens left the country. And the politicians and voters went apoplectic: "Th-th-th-th-ey ca-ca-ca-ca-n't-d-d-d-d-d-do-th-th-th-th-that!" Like there's some kind of rule that people just have to sit back and take this crap.

Whereas if they'd just left it alone, your business (or France's wealthiest) would stay in place, paying the existing taxes.

The parasite dies with the host. Some parasites maintain a balance where the host lives and by extension, the parasite lives too through the host. But some parasites get greedy, and end up killing the host. And the parasite cannot live without the host. Politicians and voters are the latter kind of parasite.

I personally think suffrage should be re-balanced to the point where those who vote have the most to lose, not the most to gain at somebody else's expense. Don't get mad at me. I doubt it will ever happen.
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