And the conclusion is ...?

Reader comment on: Capital Is Mobile

Submitted by Cristian (United States), Feb 8, 2010 15:09

I am getting the sense that you are suggesting that states should be a lot more accommodating with the "high-flyers". Such a policy has already proven where it would lead: see corporate tax and Delaware and the hodge-podge of special exemptions that each state has given to a business or other to bring them in or keep them in. An accommodating policy is essentially a race to the bottom and would put states in the same situation financial institutions are today: offering increasingly ridiculous compensations to "high value" individuals that at best will stay with them for a couple of years.
While NJ tax is high, NYC taxes are pretty high (not to mention the real estate) and yet nobody is worried about driving out the "wealth". So I guess NJ has no intangibles to offer (other than proximity to NYC). But perhaps the effect you describe is not all bad. The "fleet footed" do no have strong ties to the community, are not that interested in the general well being of the state/county or of its public services so one could argue that the state would be better served by taxing the people that DO want to stay and limiting its services to whatever tax income that will yield, i.e. "living within their means instead" (a novel concept I know).
And I am just amazed every time I hear that if taxes are raised individuals or companies will move out of US . I fail to see what other country in the world celebrates wealth and "success" as much as US does. The only other viable options are UK or a couple of Western Europe countries (though even they are not as accommodating towards wealth as Americans). If you were to move to Latin America, Eastern Europe, Russia or China having lots of money is not enough (and may even hurt you) if you do not have the right political connections with whatever party happens to be in power at a given moment.

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