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That works once, then it stops working in the future and backfires because people would no longer be motivated to create wealth in that jurisdiction. Which mean

by wilfra 14y ago

That works once, then it stops working in the future and backfires because people would no longer be motivated to create wealth in that jurisdiction. Which means no jobs and no tax revenue.

mjn 14y ago
How long does it take to stop working? I'm living in Copenhagen, and it seems to have been working here for quite a while now. And it makes the city much nicer for everyone. As a middle-class professional, I don't need the social welfare system myself (at least, not currently), but I still do benefit from the quality of life that comes from living in a city with very low crime, relatively low poverty, and reasonably good (though far from perfect) economic equality. Occasionally people do leave, whether for tax reasons or other reasons, but on the whole even the wealthy agree that the quality of life you get from living here is worth the expense paid in taxes, compared to moving somewhere that's more unequal and more violent. If anything I would guess there is a net influx of well-off people, and there would be more of one if immigration rules were loosened, to make it easier for wealthy people to move here from outside Europe.
- mseebach 14y ago
  > How long does it take to stop working? For Denmark, about another 7 years. Why do you think the government is acting the way it does? (For those not familiar with the situation, pursuing a reform strategy in straight opposition of explicit pre-election promises). By then, the baby-boomers will have retired and the smallest generation in modern history is left to pay for everything. As for crime, there is no evidence that low inequality causes low crime rates, or the opposite. Significantly more inequal Switzerland and Singapore has lower homicide rates.
  - cabalamat 14y ago
    > As for crime, there is no evidence that low inequality causes low crime rates, or the opposite. This study disagrees: http://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CDQQFjAA&url=http%3A%2F%2Fsiteresources.worldbank.org%2FDEC%2FResources%2FCrime%2526Inequality.pdf&ei=84A7UZm8GYrX7AaFuICoBg&usg=AFQjCNG1UWTClbt1zJnVlINofhsZnOtjZQ&sig2=ZrSYH5nrhveZoyr0oNY94Q&bvm=bv.43287494,d.ZGU&cad=rja http://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s...
  - vacri 14y ago
    That's some nice confirmation bias you've got going on there.
polymatter 14y ago
Do you honestly believe the ultra-rich work for money? Imagine, if you were a multi-millionaire, would you go to a job you hated for 60 hours a week?
- mseebach 14y ago
  Do you honestly believe that there is no level of taxation where the ultra-rich (and the moderately rich which is where most tax-revenue comes from anyway - there are just many, many more of them) will react and leave?
onlyup 14y ago
Can you provide a source/study for this?
- wilfra 14y ago
  You need a source to confirm that if you take the wealth away from the rich people in your tiny island nation, other people are not going to be motivated to create wealth there in the future? Hong Kong and Singapore thrive because they are low tax, low regulation havens for the rich. Start enacting 'eat the rich' policies and the rich will go elsewhere.
  - onlyup 14y ago
    Yeah, you're saying it as a fact so I assume the scenario has played out before and has been documented.
    - wilfra 14y ago
      You're implying that it could possibly be inaccurate, so I assume the opposite scenario has played out before and has been documented. Can you provide a link or source?
cma 14y ago
Not really. Wealth attracts people primarily due to change in relative status as compared with other people. So if you do progressive taxation, someone who makes 1 million before tax still ranks higher than someone who makes 2 million before tax, even if ends up that they make 700,000 and 1,200,000 respectively. Due to the marginal utility curve of having more money, they really aren't that different off in other non-status related respects either. It certainly can have adverse affects on investment payoffs that distort market logic; if you could figure out a way to progressively tax consumer consumption instead of income you could get around that.
- wilfra 14y ago
  Rich people who live in Hong Kong do not view their relative wealth like people who live in Manhatten, because they surely travel frequently and are thus acutely aware of just how much richer they are than everybody else on the planet, while rich people in Manhatten can get trapped in the cognitive bubble you are describing and misunderstand their relative wealth. Singapore, being a rich island nation, works the same. If they started taxing the shit out of their rich it would certainly result in many of those people leaving the country and many, many more not setting up shop their in the first place.
  - bearmf 14y ago
    Surely rich people in Manhattan never travel?
    - wilfra 14y ago
      Sure they do but on average a millionaire from HK is going to travel internationally a lot more - especially to poor countries - than a millionaire from New York, simply due to geography and living on a small island. All they have to do is walk over the border into Shenzhen to get a sense of just how rich they are. One could conceivably grow up in NYC and never grow to truly appreciate how much their life differs from those in the poorest parts of the World.
      - 14y ago

by wilfra 14y ago

That works once, then it stops working in the future and backfires because people would no longer be motivated to create wealth in that jurisdiction. Which means no jobs and no tax revenue.

mjn 14y ago

How long does it take to stop working? I'm living in Copenhagen, and it seems to have been working here for quite a while now. And it makes the city much nicer for everyone. As a middle-class professional, I don't need the social welfare system myself (at least, not currently), but I still do benefit from the quality of life that comes from living in a city with very low crime, relatively low poverty, and reasonably good (though far from perfect) economic equality. Occasionally people do leave, whether for tax reasons or other reasons, but on the whole even the wealthy agree that the quality of life you get from living here is worth the expense paid in taxes, compared to moving somewhere that's more unequal and more violent. If anything I would guess there is a net influx of well-off people, and there would be more of one if immigration rules were loosened, to make it easier for wealthy people to move here from outside Europe.

mseebach 14y ago
> How long does it take to stop working? For Denmark, about another 7 years. Why do you think the government is acting the way it does? (For those not familiar with the situation, pursuing a reform strategy in straight opposition of explicit pre-election promises). By then, the baby-boomers will have retired and the smallest generation in modern history is left to pay for everything. As for crime, there is no evidence that low inequality causes low crime rates, or the opposite. Significantly more inequal Switzerland and Singapore has lower homicide rates.
- cabalamat 14y ago
  > As for crime, there is no evidence that low inequality causes low crime rates, or the opposite. This study disagrees: http://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CDQQFjAA&url=http%3A%2F%2Fsiteresources.worldbank.org%2FDEC%2FResources%2FCrime%2526Inequality.pdf&ei=84A7UZm8GYrX7AaFuICoBg&usg=AFQjCNG1UWTClbt1zJnVlINofhsZnOtjZQ&sig2=ZrSYH5nrhveZoyr0oNY94Q&bvm=bv.43287494,d.ZGU&cad=rja http://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s...
- vacri 14y ago
  That's some nice confirmation bias you've got going on there.

polymatter 14y ago

Do you honestly believe the ultra-rich work for money? Imagine, if you were a multi-millionaire, would you go to a job you hated for 60 hours a week?

mseebach 14y ago
Do you honestly believe that there is no level of taxation where the ultra-rich (and the moderately rich which is where most tax-revenue comes from anyway - there are just many, many more of them) will react and leave?

onlyup 14y ago

Can you provide a source/study for this?

wilfra 14y ago
You need a source to confirm that if you take the wealth away from the rich people in your tiny island nation, other people are not going to be motivated to create wealth there in the future? Hong Kong and Singapore thrive because they are low tax, low regulation havens for the rich. Start enacting 'eat the rich' policies and the rich will go elsewhere.
- onlyup 14y ago
  Yeah, you're saying it as a fact so I assume the scenario has played out before and has been documented.
  - wilfra 14y ago
    You're implying that it could possibly be inaccurate, so I assume the opposite scenario has played out before and has been documented. Can you provide a link or source?

cma 14y ago

Not really. Wealth attracts people primarily due to change in relative status as compared with other people. So if you do progressive taxation, someone who makes 1 million before tax still ranks higher than someone who makes 2 million before tax, even if ends up that they make 700,000 and 1,200,000 respectively. Due to the marginal utility curve of having more money, they really aren't that different off in other non-status related respects either. It certainly can have adverse affects on investment payoffs that distort market logic; if you could figure out a way to progressively tax consumer consumption instead of income you could get around that.

wilfra 14y ago
Rich people who live in Hong Kong do not view their relative wealth like people who live in Manhatten, because they surely travel frequently and are thus acutely aware of just how much richer they are than everybody else on the planet, while rich people in Manhatten can get trapped in the cognitive bubble you are describing and misunderstand their relative wealth. Singapore, being a rich island nation, works the same. If they started taxing the shit out of their rich it would certainly result in many of those people leaving the country and many, many more not setting up shop their in the first place.
- bearmf 14y ago
  Surely rich people in Manhattan never travel?
  - wilfra 14y ago
    Sure they do but on average a millionaire from HK is going to travel internationally a lot more - especially to poor countries - than a millionaire from New York, simply due to geography and living on a small island. All they have to do is walk over the border into Shenzhen to get a sense of just how rich they are. One could conceivably grow up in NYC and never grow to truly appreciate how much their life differs from those in the poorest parts of the World.
    - 14y ago