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I think it's because investment money can be moved away easier and faster than labor. As a result, taxes have to be more competitive relative to other areas. I

I think it's because investment money can be moved away easier and faster than labor. As a result, taxes have to be more competitive relative to other areas. I also don't think it's about incentivizing investing relative to labor. The incentives are for investing relative to other things you could do with money, like spend it, save it, move it elsewhere, etc.

wing-_-nuts 5y ago
Money belongs to people, and those people don't tend to move. Heck, the US is especially good at taxing people abroad. How many would really renounce citizenship just to save on taxes, and where would they go that taxes less? There's always a pull between spending and saving, but if you save, you're either investing, or losing money to inflation.
- moduspol 5y ago
  > Money belongs to people, and those people don't tend to move. The tax isn't for their money, it's for their capital gains, which only happen when they realize those gains (e.g. sell assets). High net worth individuals absolutely can and do move to lower tax areas if the incentive is sufficient, or otherwise choose not to move to higher tax areas. It happens between US states all the time. > Heck, the US is especially good at taxing people abroad. Has it improved significantly since 2014 [1]? > How many would really renounce citizenship just to save on taxes, and where would they go that taxes less? Perhaps somewhere other than Canada, France, Holland, Denmark or Sweden, and without renouncing their citizenship. There seems to be this idea that simply because the IRS tax rules apply to expatriates, that everyone bends over backwards to report their incomes and pay their taxes the same way they would in the US. I just haven't seen evidence that's the case--particularly among high net worth individuals leaving for that purpose. And regardless, ideally our rates would be competitive and investors should want to put their money here. A "where else are you gonna go" attitude only works while there aren't better options, which may not be forever for all taxpayers. [1] https://www.forbes.com/sites/procedurallytaxing/2014/11/18/international-collection-efforts-by-the-irs-expanding-the-number-of-treaties-in-which-we-have-collection-language/?sh=3a3dc3ff1e08 https://www.forbes.com/sites/procedurallytaxing/2014/11/18/i...

wing-_-nuts 5y ago

Money belongs to people, and those people don't tend to move. Heck, the US is especially good at taxing people abroad. How many would really renounce citizenship just to save on taxes, and where would they go that taxes less? There's always a pull between spending and saving, but if you save, you're either investing, or losing money to inflation.

moduspol 5y ago
> Money belongs to people, and those people don't tend to move. The tax isn't for their money, it's for their capital gains, which only happen when they realize those gains (e.g. sell assets). High net worth individuals absolutely can and do move to lower tax areas if the incentive is sufficient, or otherwise choose not to move to higher tax areas. It happens between US states all the time. > Heck, the US is especially good at taxing people abroad. Has it improved significantly since 2014 [1]? > How many would really renounce citizenship just to save on taxes, and where would they go that taxes less? Perhaps somewhere other than Canada, France, Holland, Denmark or Sweden, and without renouncing their citizenship. There seems to be this idea that simply because the IRS tax rules apply to expatriates, that everyone bends over backwards to report their incomes and pay their taxes the same way they would in the US. I just haven't seen evidence that's the case--particularly among high net worth individuals leaving for that purpose. And regardless, ideally our rates would be competitive and investors should want to put their money here. A "where else are you gonna go" attitude only works while there aren't better options, which may not be forever for all taxpayers. [1] https://www.forbes.com/sites/procedurallytaxing/2014/11/18/international-collection-efforts-by-the-irs-expanding-the-number-of-treaties-in-which-we-have-collection-language/?sh=3a3dc3ff1e08 https://www.forbes.com/sites/procedurallytaxing/2014/11/18/i...