A lot of attention is given to illegal immigration in the U.S. and rightly so. But another problem that could have even greater effects is the expatriation of wealthy Americans looking for lower taxes. The number of Americans leaving the U.S. has set records for the last four years in a row. According to the tax law firm Andrew Mitchel LLC, “the escalation of offshore penalties over the last 20 years, (which) is likely contributing to the increased incidence of expatriation.”
Patrick Chougule writes in The American Conservative that America’s top 1 percent pay more than 39% of the country’s personal income taxes. It’s not hard to see why these wealthy Americans would feel the urge to head for a friendlier locale. He continues:
The latest IRS data reveals that the top 1 percent of earners pay over 39 percent of total personal income tax revenues, while the top 5 percent pay 60 percent. Trump’s proposed reduction of the top personal income tax rate from 39.6 percent to 35 percent—the same rate that prevailed as recently as 2012 when Barack Obama and Nancy Pelosi were in charge—would not fundamentally change this equation.
What might change, however, is the willingness of the rich to keep paying their taxes in the first place. The fact that a Republican-controlled government will not even propose a rate below 35 percent sends an unambiguous message to the wealthy. America has arrived at a new national consensus: a populist Republican Party now agrees with the Democrats that a tiny sliver of Americans should pay for everyone else’s entitlements.
This paradigm shift should concern even those who otherwise agree with White House chief strategist Stephen Bannon that “all this theoretical Cato Institute, Austrian economics, limited government…doesn’t have any depth to it.” There’s nothing theoretical about the fact that the wealthy—and the aspiring rich—have unprecedented opportunities to move their money abroad, beyond the reach of the IRS. Whatever fantasies of “social justice” or “economic nationalism” Washington is dreaming up, the game is over once the wealthy take to the shores of other countries less enchanted with Robin Hood economics.
Read more here.