When taxes are high in one state, businesses and individual tax payers have the freedom to move to another state. The number of millionaires who have left New York is getting to Red Sea proportions. Rush Limbaugh moved his operation to Florida, a state that doesn’t have a state income tax. Lebron James was considering joining the New York Knicks until he found out how much he would be paying in New York state and city taxes. Like Limbaugh, he chose Florida. He plays for the Miami Heat.
It’s not just the politicians who want to stick it to the rich. A Siena College poll reported that 72% of New York voters support the tax to avoid further budget cuts. The union-backed “99 New York” rally supported extending the “millionaire’s tax” on New Yorkers with incomes over $200,000. It was due to expire December 31, 2011.
Some people in New York understand the long-term consequences of taxing the rich. Democratic Gov. Andrew Cuomo says taxing high income New Yorkers would send them to the low-tax states of Connecticut and New Jersey, taking their income-tax revenue, job skills, and businesses with them.
The people of New York, like the people in Greece, want their handouts, and they want other people to pay for them. Greece doesn’t have low tax and no-tax states like we have in America. There’s no place to flee. So remedies do companies have when they can’t compete globally because of Federal taxing policies? They move their operations overseas.
Who will ultimately pay this tax? Consumers. Companies will consider the new tax a cost of doing business and tack on the additional costs to the products they sell. A similar thing happens when people call for tariffs on foreign goods. Tariffs make foreign goods more expensive and push up the price of American products. Again, consumers are the losers.
Instead of overhauling our nation’s tax system, the Obama Administration wants to set up what they are calling a “global minimum tax” or in the language of Newspeak, “a basic minimum tax”:
Earlier this week, White House economic adviser Gene Sperling announced his support for changes in the tax structure. “[W]e need a global minimum tax so that people have the assurance that nobody is escaping doing their fair share as part of a race to the bottom or having our tax code actually subsidized and facilitate people moving their funds to tax havens,” Sperling said at an official White House meeting. He even indicated that President Obama “supports” this change.
Technically, it would not be a “Global Tax” but a punitive tax , an unnamed White House “official” told Politico, on American companies “that ship jobs overseas.”
The reason these companies ship jobs overseas is that they can’t compete globally because costs are too high in the United States. The way to remedy the problem is to lower taxes here. Instead, the Obama Administration has resorted to class warfare rhetoric. No wonder. He’s seen the polls. If 72% of New Yorkers want rich people to pay more in taxes, it’s quite obvious that slapping a minimum tax on oversea corporations is an easy sell.
These same people will bellyache that everything they buy will be more expensive and blame the corporations. The corporations aren’t the problem; it’s the taxing structure, and I might add, the unions. The unions killed the American textile industry in the United States. It’s nearly killed the automobile industry.
Maybe the President should push a “basic minimum” tax on the 47 percent of Americans who don’t pay a dime in Federal income taxes but who vote for more taxes on their more productive and job-creating neighbors.