Capital Flight

No matter how much the left promises to expand government entitlements at the expense of the wealthy, there will never be enough money to fund these promises and the wealthy will merely take their wealth elsewhere because they can. 

There is a common misperception perpetuated by the secular progressives that the wealthy can be forced to turn over a significant share of their wealth to fund government entitlement programs. The left certainly knows better than this, but they count on average Americans either not being aware of this or not caring enough to figure it out. Besides, the secular progressive left is populated by an inordinate number of wealthy individuals reluctant to part with their wealth. This is evident from the paltry sums raised by the tax form change that enabled wealthy Americans to voluntarily donate extra money above their normal taxes to fund government.

Americans to some degree realize that raising taxes on the rich is code for raising taxes on the middle class as indicated by numerous surveys. As the economy continues to be mired in recession, more Americans are pushed lower down the economic ladder. As the number of Americans falling below the middle class increases, so too do the calls for raising taxes to expand government entitlements.

The secular progressive plan calls for a removal of God from the public square to blunt the Puritan work ethic that has served as the backbone for American prosperity. There is no longer any shame in acceptance of government benefits as Americans rationalize the situation by observing the increasing numbers migrating to the rolls. By strangling the economy through excessive government regulations and increasing taxes that penalize entrepreneurial activity, even more Americans are forced to accept government entitlements thus making expansion of these programs a self-fulfilling prophecy.

The left naturally blames conservatives for a situation they created and under which they prosper. They point envious fingers at the wealthy to stoke class warfare and demonize conservatives for defending the capitalist system which took America from discovery to the most powerful nation in the world in 400 years. They point to inequities in the capitalist system arising from government interference they themselves engineered and castigate conservatives who wish to remove these impediments as being defenders of the crooked, greedy, and wealthy.

Wealth has responded to the actions of President Obama and the radical secular progressive agenda of his first term by remaining on the sidelines in anticipation of his electoral defeat. His reelection portends even more aggressive expansion of the secular progressive agenda, and we will begin to see an increase in the transfer of wealth from America to more friendly locations with lower tax rates and fewer regulations. Progressives will continue to demonize this movement by accusing the wealthy of abandoning America to take advantage of other oppressed peoples of the world while conveniently overlooking the actions of those wealthy whom they favor.

The fact is that wealth has been quietly transferring offshore for many years with manufacturing operations moving to China and corporations relocating to more attractive locations such as Ireland. Wealthy progressive Warren Buffet continues to agitate for higher taxes partly because the bulk of his earnings come from capital gains which are taxed at lower rates and the fact that he operates a lucrative business devising wealth protection schemes for estate planning. Other wealthy progressives seek to limit the number of Americans able to join them in the exclusive ranks they inhabit by confiscating wealth as it is earned.

The wealthy will never allow themselves to be unduly taxed as they have the means to leave when tax burdens become oppressive. Most Americans do not possess the means to pack up and move to another country or have enough assets to transfer offshore beyond the reach of the IRS. The wealthy progressives agitate for higher taxes then leave us to pay them.

Americans must realize that higher taxes and oppressive regulations hurt businesses’ ability to generate profits and hire workers. Higher business costs are passed along to customers who seek maximum value for their hard earned dollars. Consumers will only pay more for a product when they determine that there is sufficiently higher quality to justify the higher price. They are only so willing to absorb higher prices until lower priced foreign products become more attractive. Buy American is a nice slogan, but it doesn’t register with an individual consumer seeking to stretch the value of their paycheck.

Various schemes to tax the wealthy have always failed in the past and will continue to fail due to the resourcefulness of Americans at avoiding taxes they feel are unjust and unfair. In the 1990s, taxes were raised on luxury goods in the mistaken belief that the wealthy would be unable to avoid their payment. The result was the destruction of the American yachting industry as it moved overseas and the rise of alternative luxury cars such as Lexus and Infinity. The wealthy merely navigated around the duties as they continued to acquire the objects of their desire. This tax was such a disaster that Senator George Mitchell from Maine, sponsor of the original tax legislation, sponsored its repeal in an attempt to revive the moribund yacht building industry that previously called Maine home.

America’s founders sought to encourage capitalism as the most efficient use of limited capital to provide needed goods and services that would allow the young country to grow and prosper. So successful was America at applying capitalism that it continues to draw immigrants to its shores in search of prosperity. Wealth was seen as something to which one aspired, and prosperity encouraged the competitive spirit of Americans. Businesses thrived and our standard of living rose to the highest point in human history as ordinary Americans now possess luxuries unimaginable to civilizations past.

However, with prosperity came the luxury of leisure that allowed the unscrupulous to stoke envy and class warfare as they placed ever greater demands on the wealthy. Wealth has been portrayed as evil and Americans have forgotten that wealth and capitalism is responsible for the high standard of living we enjoy that allows us the leisure of envy. It is time Americans remember the lesson of the fable involving the golden goose in which the greedy owners killed off the golden goose because they could not bear to wait for it to lay its golden egg each day. Wealth will flow to those locations in which it is welcomed through lower taxes and less regulation, and will benefit those peoples at the expense of Americans.

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