Governments will propose new and higher taxes, people with large incomes and abundant wealth will dispose, voting with their feet for other jurisdictions. From Simon Black at sovereignman.com:
Bill Gates and I don’t agree on taxes.
He says that he should pay more. And I consider it my moral duty to pay as little tax as possible. I don’t want to fund the government’s destruction, corruption and waste.
But in an interview with Fareed Zakaria, Bill Gates did echo my Universal Law of Prosperity: produce more than you consume.
Bill noted that the government “only collect[s] about 20% of GDP and we spend like 24% of GDP, so you can’t let that deficit grow faster than the economy.”
The US has over $22 trillion in debt, and is adding $1+ trillion of red ink every year. And this is in good times.
Then Bill Gates checked off another Sovereign Man theme: “the promises the government has made like taking care of healthcare and pensions, those will become more expensive, a higher percentage of GDP.”
He’s putting it lightly… Worldwide, pensions are short $70 TRILLION. State, federal and local pensions in the US are $7 trillion short, not counting $50 trillion of unfunded Social Security liabilities. And so far the only solution politicians can think of is more debt.
But as much as Bill would love to see the rich taxed more, he recognizes that you have to be careful.
He understands the rich are the most adept at avoiding taxes. Even when taxes in the US were 70%, the actual collection was only around 40% thanks to deferrals and other maneuvers.