4 ms·

What taxes are you talking about that are much higher than in prior periods? I've heard from a lot of investors that high taxes don't really impact their decis

What taxes are you talking about that are much higher than in prior periods? I've heard from a lot of investors that high taxes don't really impact their decisions. A good investment is a good investment. High taxes on middle class people however can have a stifling effect, because they don't have the extra cash to keep circulating in the economy.

philiphodgen 14y ago
As a (well-paid) international tax lawyer, my anecdotal evidence is that high taxes absolutely impact business and investment decisions. I too see these quotes about tax being an irrelevant item to business decisions. I call bullshit on them, and especially Warren Buffett when he says it. Tax is regulation. Just as you see the entrenched cab industry attempting to cudgel Uber out of the marketplace, so too do entrenched interests use tax law to their advantage or to their competitors' disadvantage. People who say decisions are not affected by tax are saying that decisions are made on factors other than net profit after tax. They are also assuming that all investments are made within a single taxing jurisdiction, so that it is impossible to take your money from a 40% tax jurisdiction and put it to work in a 10% tax jurisdiction. Tax is not the only factor in play for business and investment decisions. There are other factors as well. Government red tape is, in my experience, a greater deterrent to business and investment expansion than tax. A high-tax country with a highly efficient, transparent, and predictable bureaucracy (think Western Europe, with variations of course) will be more attractive than an inefficient, dunderheaded bureaucracy-ridden country with a looser tax policy (think Southern Europe). There are lessons for the United States in all of this. Why does money flee from some places? And how can the United States avoid creating the same factors that make capital flee? Don't get me started on government policies that make brains flee the country. That's an order of magnitude more damaging than watching money go away.
prostoalex 14y ago
> A good investment is a good investment. Only if you have the money to invest, as opposed to keeping it to cover your tax bill.

philiphodgen 14y ago

As a (well-paid) international tax lawyer, my anecdotal evidence is that high taxes absolutely impact business and investment decisions. I too see these quotes about tax being an irrelevant item to business decisions. I call bullshit on them, and especially Warren Buffett when he says it. Tax is regulation. Just as you see the entrenched cab industry attempting to cudgel Uber out of the marketplace, so too do entrenched interests use tax law to their advantage or to their competitors' disadvantage. People who say decisions are not affected by tax are saying that decisions are made on factors other than net profit after tax. They are also assuming that all investments are made within a single taxing jurisdiction, so that it is impossible to take your money from a 40% tax jurisdiction and put it to work in a 10% tax jurisdiction. Tax is not the only factor in play for business and investment decisions. There are other factors as well. Government red tape is, in my experience, a greater deterrent to business and investment expansion than tax. A high-tax country with a highly efficient, transparent, and predictable bureaucracy (think Western Europe, with variations of course) will be more attractive than an inefficient, dunderheaded bureaucracy-ridden country with a looser tax policy (think Southern Europe). There are lessons for the United States in all of this. Why does money flee from some places? And how can the United States avoid creating the same factors that make capital flee? Don't get me started on government policies that make brains flee the country. That's an order of magnitude more damaging than watching money go away.

prostoalex 14y ago

> A good investment is a good investment. Only if you have the money to invest, as opposed to keeping it to cover your tax bill.