High Tax Rates

People do react to high tax rates.  This Wall Street Opinon Journal article examines the effect of Obama tax proposals.  In some countries, people exercise their Alec Baldwin option and vote with their feet.  They leave.

As the article states, it won't work for Americans, because US citizens are taxed on their worldwide income.  However, it should reduce the number of talented and educated foreigners trying to get into the US.

Tax proposals that are targeted at various activities and special groups are a source of mischief.  First, they are political chips that are used for various forms of vote buying and punishment.  Second, they are gasoline on the fires of class warfare and political discord.  Third, they provide the openings for outright corruption of the tax code. 

Worst of all, they do not collect a higher rate of revenue, because the economy is weakened, and people arrange their affairs so as to not generate taxable income.