I've been around a while, and I don't recall rich people ever having a problem obtaining money. They also don't mind paying taxes on money they need to live on. Where the taxes are a problem is investment capital, coupled with the fact that rich people aren't stupid. They don't have to invest their capital in things here, which can be excessively taxed. They can choose to invest elsewhere, and they do. They can use their wealth to create more wealth elsewhere, without the tax burden. What small amount they use to live on, could just be a fraction of what they gained for the year, and that is all they will pay tax on. Their wealth continues to grow and multiply, but someone else is benefiting from jobs it creates and prosperity.
Let's say we have someone who has $100 million in foreign investments. Each year, his investments return a healthy 10% ($10 million) but his annual living expenses are around $1 million. He will pay 36% tax on $1 million, but the other $9 million he earned, is not taxed because it wasn't claimed as income, it remains invested overseas, along with the rest of his $100 million. He doesn't bring all this wealth home, because you'd want to charge him $36 million in taxes immediately, if he did so. Then, if he made the $10 million here, you'd charge him $3.6 million more in taxes here, while he can keep the money were it is and pay little or no tax. You still get $360k in taxes on his $1 million earned income, but that's it. Now maybe you are fine with that, and everyone is happy, but not having his $100 million in our economy, is costing jobs and venture investment capital, which is creating a really shitty economic condition for us. EVEN IF we had to waive his tax liability on the $100 million, it would be worth it to have that money in the US, where the $10 million annual dividend could be taxed, and at the same time, the $100 million could be used to create new jobs and economic prosperity.
Then, there is one other aspect to this. Of all the rich people I've ever known, I never knew one who NEEDED to make money. Some LIKED to do it, some WANTED to do it, but I can't think of a singe rich person who ever NEEDED to make money. They seem to always have their necessities covered, they do as they please and live as they like, but their wealth is such that they simply do not care to try and make more money. Most of us can't relate, we have a NEED to make money, we have bills to pay and a lifestyle to maintain, etc. Because we don't possess wealth, we have the perspective that we NEED to make money. Some of us can't even rationalize that others would not have this same need, and so we get this thinking that we can excessively tax the rich, and they have no choice but to pay up.
We do not tax wealth in this country. We tax INCOME. A wealthy person doesn't really NEED an income. They can live comfortably for the rest of their lives, and probably their children as well, on the acquired wealth they now have. Yep, we already sock it to them at tax time, most of them pay more Federal tax than some of us will earn in income over the next 10 years. But this is largely due to their lifestyle choices and the fact they don't really mind paying the taxes to live rich in America. The more taxation we heap on, the less a rich person enjoys making money or trying to make money, and even living a rich lifestyle. The more you add to the tax burden, the less they are inclined to use their wealth to generate more wealth. The more they are inclined to cut back on what they do, sell the yacht or jet, and the villa in Paris. They start paying lawyers and accountants to figure out ways they can move their wealth to their kids and grandkids, through off-shore accounts, treasury bonds and annuities, college savings funds, etc. They STOP making their wealth available for capitalist investment because there is no longer enough justifiable reward for the cost involved and the risks. Now, what THIS does, is it affects people in the upper middle class, who are trying to start a small business, or become wealthy themselves. They no longer have the available financial power to make it happen, and must really struggle to meet the ever-increasing demands and costs of doing business. This means they have to downsize and become very efficient, which means fewer jobs and less pay for the work expected. This affects the middle and lower classes because it stifles almost all job creation.
