No one knows for the time being as to what exactly Bernard Arnault, France's richest man, intends to do in order to escape the punitively high 75% tax rate being proposed by President Francois Hollande.But it should come as no surprise that he and scores of other wealthy French citizens are looking to organize their financial affairs differently so as to reduce their exposure to what amounts to little more than a smash-and-grab raid on the country's most successful businessmen that will in all likelihood prove counter-productive.After all, we live in a world where different countries operate with different tax regimes, competing (I would hope) to attract businesses -- and therefore jobs -- to their shores. So if one country creates an environment where those who have done well for themselves are suddenly stung with a massive hike in the money the state wants to confiscate from them, they cannot be blamed for wanting to rearrange their finances, their domicile or even their nationality.And, lest we forget, those with the greatest financial resources are those who will find it easiest to relocate in that way. Hence, in the past, we have spoken of a "brain drain" when tax in a particular jurisdiction has become excessively high. And when those individuals relocate, not only will the country's treasury miss the additional tax that they would have paid, but it most likely loses all the revenue that they were paying beforehand. That is one of the ways in which increasing a tax rate can reduce the total tax yield, thereby defeating the whole supposed object of the tax-raising exercise.
The Soviets thought they had equality, and welfare from cradle to grave, until the illusory free lunch of redistribution took its inevitable course, and cost them everything they had: first to go was their privacy and freedom, then on being ground down to an equality of poverty only, for many of them their lives as they tried to escape a life behind the Iron Curtain. In the common good, was found only slavery to the prison of each other's mind; instead of the caring state, they got the surveillance state to keep them in line. So why are we accumulating a national debt to build the slave state again in the West?
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