TLDW
Capital flight is ultimately a myth cause the people who complain about high taxes and moving are already not paying taxes.
The vast majority of people aren’t going to give up their homes to save a few bucks.
TLDW
Capital flight is ultimately a myth cause the people who complain about high taxes and moving are already not paying taxes.
The vast majority of people aren’t going to give up their homes to save a few bucks.
This is how it works for regular income earning folks but yet the billionaires skate around those laws because it’s an “investment” or whatever.
No, it is not.
Suppose I am a billionaire intent on paying as little in tax as possible. I own or control a huge company (or some other investments) whose profits I want to benefit from. Under current US tax laws, I could purchase a citizenship of a country with lenient tax laws, move there, and then renounce my American citizenship. All the shares of American companies I would sell to an American holding company, which I register in Delaware (which has very low corporate tax). That holding company would then be owned in full by a company which I register in a tax haven country like the Cayman Islands. I have the American company give ownership of things like the company’s intellectual property to the holding company, which it leases back to the original company. When the original company makes profit, the holding company then charges the original company for use of intellectual property, equal to the amount of profit I want to take. This money then flows to the Cayman Islands company, free of tax as it is a business expense. The Cayman Islands company then pays this money to me as salary or as dividends, on which I pay an extremely low tax rate as a legal citizen of the tax haven country.
Under a system where the ultimate beneficial owner of money earned in the US is subject to tax, all this holding company nonsense would be meaningless because it would actually not evade any tax liability at all. This could be enforced by taxing the flow of money leaving the US (e.g. funds transferred from the American company to the Caymanian company would be taxed as if the Caymanian company were myself).
Dude, if you’re even a lowly traveling consultant in the United States and you stay in one area (i.e., state) making money for a period of time (I want to say 30 days, perhaps continuous), you have to pay taxes in that locality.
My point was that billionaires skate around these rules for all of the reasons you are stating and then some. They should be subject to them just like everyone else is.
I guess we are in agreement then
I think we are all in agreement, because this is a very reasonable position. The only people who are not in agreement with this reasonable position are the governments who refuse to change the tax laws and insist it is too dangerous, too hard or too complicated, because lawmakers actually work for and are funded by the billionaires and not us. There is nothing hard or complicated about this. Dangerous, maybe, but I am tired of being threatened by these people who want us to think there are dangers. Where there is a will, there is a way. The government has absolutely no will to do this, though.
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