Poaching the Rich

May 12, 2012 in Daily Bulletin, Signature

Why don’t countries try to poach the rich away from the United States with tax incentives? Matthew Yglesias explored the issue:

  • Some do. The cofounder of Facebook, Eduardo Saverin, has renounced his American citizenship, and has likely taken up citizenship of the country he now lives in – Singapore. This is probably because Singapore has no capital gains tax and now that Facebook is going public he’ll save a lot of money.
  • But other countries could do more. Canada could offer a flat $50,000 tax rate for Americans. America’s rich would benefit by having to pay much less tax. Canada would benefit by increasing tax revenue and attracting the rich with all of their investments.
  • If countries tried to pull tricks like that the United States could always invade.

To read more about what the United States could do, an outline for what Canada should do, details about Saverin’s case, and why the world is better off that this doesn’t currently happen, click here.

Source: Slate