Sunday, November 11, 2007

Tax Competition: Once More With Feeling!

Two recent articles highlight the new consensus about tax competition growing among economists on tax competition.

In the first, Kenneth Rogoff, former chief economist for the IMF, has an article in the Daily Star (via Cato-at-liberty) where he muses on the nature of the very wealthy. This is the money quote:

Many super-earners are also super-creative and bring enormous value. Places like the United Kingdom actively court wealthy foreign nationals through extraordinary preferential treatment of their investment income. The ultra-rich are an ultra-mobile group, too. If you are earning $540,000 an hour, it does not take too long to save up to buy an apartment, even in London.
The second, also from Cato, is about British race car driver Lewis Hamilton, who has moved to Switzerland. He claims that he wants solitude, but the Mirror notes that he will save about $8 million per year in taxes. As the rich flee high tax jurisdictions, those jurisdictions will continue to complain about the "unfair taxation" that is stealing their God-given tax base.


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