It's that time of year again. The IRS has published another year's worth of collections data and Action America has updated our annual feature article, The Economy Bomb - Ticking Down Faster, dealing with, among other things, the effects of our tax system on the movement of wealth.
Besides the new IRS collections data, there are a lot of other issues addressed in that article. Among the new information available in this year's installment of Economy Bomb, is data that we have compiled from the Forbes Magazine lists of the 400 Wealthiest Americans and the World's Billionaires. Since 1999, the number of billionaires in the US has grown at a rate that is just slightly larger than can be explained by inflation, while the number of billionaires worldwide has grown at a rate six times greater (22% vs. 132%).
That's just one of many pieces of coroborating information that indicates a rather sizable movement of wealth and the wealthy out of the US. Check out the article, to find out more about the consequences of this shift. Then come back here to discuss it.
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4 comments:
Great article John. I am sending a link to some Socialist "friends" although I am not sure that they will have the fortitude to read it. Does not matter, I love to see them get ill.
Wonderful Article - Many years ago a lady by the name of Ian Rand wrote the book 'Atlas Shrugged'. It has guided my beliefs for almost 30 years. What is frightening is that she portrayed a country that it becoming reality - as your article points out so well. Wealth is not a crime to be punished it is a necessity for an economy to grow and prosper. If you don't know "who John Gault is" it is a must read to see where all of this can lead.
Dr. Chris Carter
You say "... or earned more than ... $125,000...".
26.877 says "average annual net income TAX ... is greater than $124,000". (Emphasis mine.)
It's just a difference of degree, but it means that the provision requires that one earn considerably more than $125K, so as to pay more than $124K in tax.
Jordan, you are right. Actually, because those in Congress, who inserted this "Expatriation Tax" into a "health" bill, were not able to keep this law a secret, Congress was ultimately forced to change it. In fact, there are some people in Congress, who are trying to further change or eliminate this piece of US Code.
The point that we need to keep in mind is that whoever the law is designed to punish will have a large incentive to leave and find a more wealth-friendly jurisdiction, where they can live, invest their large portfolios and pay tax.
If the law were aimed at punishing the poor, then it would have no negative effect upon our economy, because the poor will not have the wherewithal to leave. Furthermore, even if two or three million of them were to leave, they would represent such a small portion of our tax base and work force, at to make no substantial difference in our economy.
The problem is that this section of US Code is aimed at punishing the rich, who not only have the wherewithal to leave, but represent a combined net worth large enough that even if only a small portion of them leave, their departure will cause a significant problem for our economy.
This is already happening!
FYI, an updated version of the "Economy Bomb" article is in process, since new data was recently released by the IRS. It will address the changes in the "Expatriation Tax" law.
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