As published in the Winter Park/Maitland Observer, Thursday Jan. 3, 2012 Edition Offers... Read More »
The Jamiacan Blur Runs Away from High Taxes
Taxgirl Kelley Phillips Erb reports of more wealth-flight on the international stage:
The fastest man in the world has finally found the one thing that will slow him down: Britain’s tax laws.
According to the BBC, Bolt may not compete in the UK until the 2012 Olympics. He told a news audience, “I am definitely not going to run [in London].”
Like the US, the UK attempts to tax on worldwide income. However, unlike the US, the UK prorates the amount of tax based on the number of events that the athlete competes in; the Telegraph points out that this is a departure from the old rules which calculated tax according to the number of days of competition in the UK, not appearances. This is in addition to a 50% tax rate on appearance fees.
As you can imagine, this doesn’t sit well with many athletes. Spanish golfer Sergio “El Nino” Garcia has admitted limiting appearances in the UK because of the country’s tax laws. Event promoters worry that other athletes will follow suit. There is one saving grace: in order to ensure that athletes actually show up for the 2012 Olympics, the British taxing authorities have agreed to a limited exemption to the rule.
Actually, I’m not sure how wealthy the Jamaican blur is, but after his performance in the 2008 Olympics I have to assume he’s made a few bucks in product endorsements and autograph signings.
But it really doesn’t matter how wealthy he is.
I am no economist, but it seems intuitive that high taxes are a disincentive to the production of goods and the delivery of services. And it doesn’t take an economist to conclude that when the production of goods and the delivery of services decline, economies suffer and jobs are lost.
In a prior, less mobile age, relative tax rates did not result in widespread expatriation because the barriers to relocating were greater and nationalistic feelings more intensely felt. But today it’s much easier to move to another country and people are much less nationalistic than they once were. If they can save hundreds of thousands of dollars by making Monaco their tax home, by golly they’re going to do it.
Tax competition is real. When we raise taxes on the rich we shun the very people we should court to help create jobs and grow our economy.
Let’s wise up and stop hoisting ourselves by our own petard.
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- High Taxes Cause New Yorkers too Flee
- Michael Caine to Move to America if Brit Tax Rates Goes to 51%
- Phantom of the Opera Composer Andrew Lloyd Weber Opposes High U.K. Taxes