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Choice restrains politicians

There is much talk of co-ordinated action against tax shelters, with governments urged to work together to prevent individuals and businesses settling in low-tax locations.  High tax advocates fume at their impotence as governments are unwilling to impose the swingeing increases that would precipitate a flight of capital, business and talent.

Politicians are restrained by tax competition, and this is a good thing.  It puts a limit on their predatory powers to confiscate the monies that others have earned.  Governments like to fund redistribution programmes because this buys them votes, but it also curbs and limits the wealth-creating process.  Mobility and tax competition both stand in their way, which is why socialists seek supra-national co-operation to close off avenues of escape.

Poorer people in society have generally done better as it becomes wealthier.  The sensible course is to boost the wealth-creating process, not to seek new ways of curbing it.

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One Response

  1. How very erudite.

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